Palm Kernel Oil Prices Exhibit an Upward Trend Globally in November 2023

Across the global market, including the US and European regions, the prices of Palm Kernel Oil witnessed an escalated market trend throughout November 2023. One of the key factors supporting this increase in prices includes high demand for Palm Kernel Oil, which has surged across several industries, compounding supply chain issues. Palm Kernel Oil is a versatile ingredient extensively used in the food, cosmetics, and pharmaceutical sectors. The growing popularity of Palm Kernel Oil in various applications, coupled with its unique properties, has led to increased demand that the current disrupted supply chain struggles to meet. The food industry has seen a rise in the consumption of various vegetable oils, including Palm Kernel Oil and other edible oils, owing to the arrival of the festive months and winter seasons, which typically surges its usage. Further supporting other sectors, including the cosmetic industry, which generally relies heavily on Palm Kernel Oil for its moisturizing and emollient properties, contributing to the heightened demand.

Furthermore, as expected by market participants, the most widely produced and used vegetable oil, palm oil, and its related oils, have been in high supply, playing a key role in stabilizing markets. Global production is expected to reach a record high in 2023–2024. The biodiesel mandates in Indonesia have led to a significant increase in industrial demand; however, the supply of Palm Kernel Oil has been adequate to meet food consumption for the entire month. Both nations, along with Malaysia, have also been successful in meeting the rising demand for their exports. Although consumers benefit from an abundant supply, palm oil production has been connected to environmental issues like deforestation and biodiversity loss. Certifications and sustainable practices are essential to guaranteeing that the production of palm oil does not result in environmental harm. Beyond the industry-specific challenges, broader economic factors have also played a role in the surge of Palm Kernel Oil prices. Inflationary pressures, fluctuating currency values, and rising costs of inputs such as energy and others have further added to the overall rising cost of production and transportation. As a result, businesses along the Palm Kernel Oil supply chain are facing increased operational expenses, which are being passed on to consumers in the form of higher prices.

However, as a result of rising Palm Kernel Oil prices trickling down to regular products on supermarket shelves, consumers were accepting the goods at a higher cost. This had an impact on the consumer market scenario. Price increases for goods like food, cosmetics, and medications that use Palm Kernel Oil as a primary ingredient have raised questions about affordability and put pressure on households from inflation. Furthermore, companies in a variety of industries are finding it difficult to control rising production costs, which could have an impact on their profitability and long-term viability. Companies are further compelled by the circumstances to reevaluate their supply chain plans, look into substitute ingredients, and possibly pass along some of the price increases to customers.

Overall, witnessing the market trend of November 2023, the prices of Palm Kernel Oil are projected to drop across the global market at a very moderate level. Merchants might focus on clearing their stockpiles at discounted rates to clear out the stocks for 2023 and restock the batch with fresh inventories.