During September 2023, the supply dynamics for Palm Kernel Oil (babassu oil) remained modest in the European region, rising stable compared to the previous month. The demand for Palm Kernel Oil in the European region was driven by its increasing use in various industries, including food and beverage, pharmaceutical, similar properties as coconut oil, and personal care.

The Netherlands is considered the biggest importer of Palm Kernel Oil from the APAC region, primarily Malaysia, followed by Germany and other nations. The European region is considered a major importer of babassu oil, and the prices for Palm Kernel Oil recovered at a reasonable rate in September 2023 after showing a consistent decline in the preceding month. Additionally, changes in exchange rates that affect the price of Palm Kernel Oil for European importers contributed to this month's price increase. As per the data, because Palm Kernel Oil is typically traded in US dollars, the depreciation of the Euro against the US dollar increases the cost of importing it into Europe. As a result, its price trajectory increased toward the end of Q3.

Second, Palm Kernel Oil was scarce due to the unfavorable weather in exporting countries like Malaysia, which also impacted the oil's accessibility in some European locations. In Malaysia, during September 2023, there persists a slight weather-related issue. However, some flooding and infrastructural damage did occur because of the intense rain and wind. This, in turn, affected all manufacturing operations, including those in the agricultural sector.

Moreover, increased demand for vegetable oils in the food industry has led to a surge in the price of all other oils, including Palm Kernel Oil, as the holiday season has arrived in exporting countries. In addition, inflation rose to the top of the list of important variables that affected the price of Palm Kernel Oil. Due to recent increases in the prices of energy, raw materials, and labor and the global economic recovery, inflation has remained high. This maintained the general rising pressure on pricing across all industries. Overall, the sum of these elements has resulted in a significant rise in the price of Palm Kernel Oil in September 2023. Prices are also anticipated to stay high in the upcoming months, but according to the ChemAnalyst forecast, they may continue to grow in the year's second half. Additionally, it is estimated that the regional market's overall demand and supply will continue to be unstable, which would strengthen the pace of imports from exporting countries. Finally, due to the steady increase in domestic and regional inquiries for Palm Kernel Oil, trade activity is anticipated to continue moving in a northerly direction.