Category

Countries

Malaysian Crude Palm Oil Market Soars High
Malaysian Crude Palm Oil Market Soars High

Malaysian Crude Palm Oil Market Soars High

  • 07-Nov-2024 2:00 AM
  • Journalist: Kim Chul Son

The world’s second largest exported of crude palm oil Malaysia reported its highest oil prices on November 5 since March 2022. It surged to US $1146 per metric tonne or 5051.55 Malaysian Ringgit (MYR). This is a whopping 44% increase in year to date and 32% increase in year on year. These prices are highest since March 2022 when crude palm oil market reached new heights at US $1722 per metric tonne (7260.86 MYR).

In just four weeks of October alone, the average weekly price rose by 3%.

The steep price rise and high price volatility is linked to rising geopolitical tensions, especially in the middle eastern region. As tensions rise, investors are seeking safer investments, including biofuels, which has an increased demand for palm oil. An already tight product ship was further aggravated by El Niño’s adverse impact on production of palm crop. Other vegetable oils like soy, sunflower, and rapeseed, have also seen a price surge due to a tight supply in key regions of the US and Europe.

Notably, the Malaysian currency Ringgit MYR strengthened in comparison with the US dollar by 5.75% in 2024. This also played a pivotal role in the price hike.

However, this surge is expected to be short termed according to our industry experts. The climatic repercussions are expected to fade away by the last quarter of 2024, which might provide some relief to the affected industries. Additionally, India's recent increase in tariffs on edible oils is also expected to reduce palm oil import demand in the final quarter of 2024.

Crude palm oil is an essential commodity widely used by many industries. Its major stakeholders are the global food industry, beauty and cosmetics industry as well as biofuel production companies. It is also a key ingredient in producing industry solvents and in pharmaceutical industry in making antiseptic creams.

Many Indian commerce giants have reacted to this price hike. The Chief Operating Officer of Hindustan Unilever Limited (HUL) Rohit Jawa in a recent conference hinted at price hike of their products. He said, “Following a prolonged period of benign commodity prices in this quarter, crude palm oil experienced inflation of 10% year on year. Given our assessment that this price increase is here to stay, we are now takinh calibrated price increases. Crude oil remained benign during the quarter but there has been recent volatility owing to geopolitical tensions; we remain vigilant and are watchful of any price fluctuations that seem to persist.”

All prices mentioned are Indian Fee on Board (FOB) prices and may vary based on respective regions and tax systems.

Related News

Indonesia to Assess Export Levies for Crude Palm Oil
  • 20-Nov-2024 11:00 AM
  • Journalist: Royall Tyler
RSPO Roundtable Conference Call for Bold, Innovative Approaches to Revitalize Sustainable Palm Oil
  • 12-Nov-2024 3:15 PM
  • Journalist: Joseph Dennie
Indonesia Sets Sights on Expanding Palm Oil Production for Biofuel Growth
  • 09-Nov-2024 2:45 AM
  • Journalist: Jacob Kutchner
Palm Oil Price Surge Reshapes Asia-Pacific Market Dynamics in the Current Week
  • 25-Sep-2024 1:41 PM
  • Journalist: Emilia Jackson