Crude Palm Oil Price Trend and Forecast

Crude Palm Oil Regional Price Overview

Get the latest insights on price movement and trend analysis of Crude Palm Oil in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

Crude Palm Oil Price Trend for the Q3 of 2024

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In the third quarter of 2024, the crude palm oil market experienced fluctuations influenced by various factors. In July, rising temperatures led to a decline in oil consumption, contributing to a weakening of demand. Palm oil inventories in Malaysia, the primary producing country, continued to grow, which added downward pressure on prices. This, combined with external bearish factors, resulted in a decline in domestic palm oil futures and spot prices. The palm oil market faced further challenges as rising prices led to continuous downward adjustments.
 

Crude Palm Oil Price Chart

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Despite these challenges, the demand for palm oil from China showed some signs of recovery in August, with an increase in the purchase of palm oil for shipping. The import volume of palm oil to China showed steady growth, with the arrival volumes for the quarter increasing. However, Indonesia's palm oil export constraints, caused by aging oil palm trees and low replanting rates, led to reduced export growth. In response, Indonesia raised its export tariffs for palm oil in September, which contributed to a price increase.

The export tax rise, along with limited production growth, created further price volatility. Overall, the market remained positively inclined, with supply dynamics, import schedules, and export tariff adjustments playing key roles in price movements during the quarter. In China, spot prices increased from approximately 1097 USD/MT in July to around 1137 USD/MT in September.

Analyst Insight

According to Procurement Resource, the price of crude palm oil is expected to normalize in the near future after running bullish in September.
 

Crude Palm Oil Price Trend for the Q2 of 2024

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The Malaysian crude palm oil prices were influenced by the paradoxical movement of the market. The production forecasts for the commodity during the second quarter of 2024 climbed by a noticeable margin despite the potential impact of severe weather conditions caused by El Nino. The higher production volumes were also supported by improved labor availability and lower prices of fertilizers. In May only, the production of crude palm oil reached around 1.7 million tons, registering an incline of almost 13% m-o-m.

Simultaneously, the imports to other Asian countries, such as India and China, also progressed, driven by the competitiveness of crude palm oil with other vegetative oils. In China, the trend was completely opposite as the prices declined slowly. The initial phase of the market was quite stable, but as the quarter progressed towards the end of the quarter, procurement fell consistently, leading to a marginal fall in crude oil prices from an average of 1146 USD/MT to 1088 USD/MT. This depreciation in the price trajectory was also visible in Indian markets as the prices lowered from an average of approximately 1039 USD/MT to 965 USD/MT.

In China, palm oil imports rose significantly, particularly in the end phase of the second quarter, as global prices declined. The imports in May were the highest standing at almost 769,000 tons since the advent of the new year, reflecting the positive stance of the consumer sector also. This is also indicated in the higher margins for traders as the purchases in May inclined to around 214,000 tons from 124,228 tons in April. The price of crude palm oil, on the other hand, consolidated in a narrow range, given the rising competition from other commodities.

Analyst Insight

According to Procurement Resource, the price of Crude Palm Oil is expected to be primarily driven by the escalating demand of the commodity and ample supplies from the majority of the exporting nations.
 

Crude Palm Oil Price Trend for Q1 of 2024

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The price trend of crude palm oil (CPO) exhibited fluctuations influenced by changes in production, consumption, and export dynamics throughout the first quarter of 2024. The production of CPO in March increased by 5.50% compared to February, reaching 4,102 thousand tons, easing down the constrictions of supply chains.

On a similar note, Indonesian domestic consumption saw a modest increase of 1.40% to 1,898 thousand tons, driven by higher food and oleochemical usage but offset by a decline in biodiesel consumption. Additionally, the region’s export volumes surged notably, with total palm oil exports rising by 18.21% in March compared to February, reaching 2,560 thousand tons.

Despite the overall increase in exports, specific markets showed varied trends, with significant volume increases to India, Bangladesh, and China, while exports to the USA, EU, and Malaysia declined due to a total ban on the usage of CPO in some and limited usage of the commodity in other regions. Another disruptive trend that was observed in the end phase of the quarter was the growing interest of consumers in other vegetable oils such as soybean oil etc., which came as a response to the consistently rising prices of CPO.

The traders thus anticipate that this might hamper the demand for CPO in the next quarters. Overall, these production, consumption, and export dynamics contributed to a mixed price trend for CPO in Q1 2024, with fluctuations influenced by global demand shifts and supply conditions amidst varying export market performances and domestic consumption patterns.

Analyst Insight

According to Procurement Resource, the price of Crude Palm Oil is expected to adopt a fluctuating stance and might be on the lower end of the pricing spectrum amid the smooth functioning of supply chains and reducing demand for the commodity globally.
 

Crude Palm Oil Price Trend for Second Half of 2023

In the later months of the year 2023, the global Palm Oil sector experienced a notable uptick driven by heightened demand, limited supplies, and currency fluctuations. Despite concerns over October's Palm Oil stockpile soaring in Asian countries, factors like severe flooding in Indonesia disrupting production and seasonal labor migration contributed to reduced output, leading to increased prices.

Rising demand from emerging economies for Palm Oil in processed foods, cosmetics, and biofuels, coupled with its role in industrial production, also supported the industry's growth. However, there was a slight avalanche in the market momentum during the end months of the third quarter when global economic parameters overpowered the demand sector of crude palm oil.

The depreciation in the European economy and stricter reforms of the US government, in order to keep the economic indicators afloat, limited the trading activities, particularly with Indonesia and Malaysia, which raised the domestic inventories of these countries and resulted in oscillations in the crude palm oil price trend.

Analyst Insight

According to Procurement Resource, the price trend of Crude Palm Oil is estimated to be driven by the slow but steady demand from the downstream industries and the reduction in agricultural output of the globe.
 

Crude Palm Oil Price Trend for the First Half of 2023

Crude Palm Oil is sourced from palm trees and is majorly exported from Asian countries. It is one of the most commonly used cooking oils. During the first half of the year 2023, the prices showcased a fluctuating trend throughout as the production in exporting countries was in surplus while the demands were on the lower side during the said period.

In the Chinese domestic market, the average spot prices went from 1139 USD/MT in January’23 to around 1033 USD/MT in June’23, showcasing an approximate decline of about 9%. Some reverse upward fluctuations were also observed in the middle of both quarters, but general sentiment remained dull.

The Indian market, on the other hand, experienced an even sharper fall as the demands declined with an approximate depreciation of about 25%, where the spot prices went from around 1350 USD/MT in January’23 to around 1000 USD/MT in June’23. Overall, a negative market sentiment was observed for Crude Palm Oil.

Analyst Insight

According to Procurement Resource, with the given supply situation in the market, the price trend for Crude Palm Oil are likely to remain on a downward trajectory in the upcoming months as well.

Procurement Resource provides latest prices of Crude Palm Oil. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.