Crude Palm Kernel Oil Price Trend and Forecast

Regional Price Overview

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

Crude Palm Kernel Oil Price Trend for the Second Half of 2023

Asia

In the third quarter, initially, the surge in demand from the downstream industries projected an optimistic outlook for the crude palm kernel oil price trend. Throughout the majority of the quarter, the supply and demand sectors of the market were able to maintain their equilibrium, but the advent of adverse weather conditions and loss of agricultural produce, along with fluctuations in consumer sentiments, led to the southward movement of the crude palm kernel oil price trend.

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However, the transition of the market towards the end of the year months and the advent of the holiday season worked in favor of the crude palm kernel oil market. The consumer demand inclined which boosted the momentum of the downstream food industry and supported the uptick of crude palm kernel oil prices.

Europe

The European countries also showcased a bullish trend during the third and fourth quarter of 2023. The region rose on the back of a limited supply of raw materials and an expanding consumer base. The reduction in supply was further intensified by the decline in the number of shipments arriving at European ports due to the disruption of the Red Sea route. The cases of drought and flood in several European countries dried the inventories while the demand for crude palm kernel oil increased by several folds, leading to a spike in its price trend.

North America

Despite moderate build-up and imports from Malaysia and Indonesia, the price trend of crude palm kernel oil in North America exhibited bearish sentiments. In the third quarter, the demand dynamics of the market were challenged by the unexpected rise in inventories and below-par support from the feedstock industries. The drought-like conditions in the Mississippi River and subsequent loss of exports also played a significant role in keeping the crude palm kernel oil price trend towards the lower side of the spectra.

However, a sudden surge in crude palm kernel oil prices was observed during the holiday season, but this was short-lived, and an escalation in transport costs and diminishing buying activities eventually caused the downfall of the overall crude palm kernel oil price trend.

Analyst Insight

According to Procurement Resource, the price trend of Crude Palm Kernel Oil is estimated to bear the consequences of fluctuating consumer behavior and limited agricultural produce.

Crude Palm Kernel Oil Price Trend for the First Half of 2023

Asia

Crude Palm Kernel Oil prices observed fluctuating trend in the Asian region in the first half of 2023. Prices mostly wavered at the lower end of the curve. Some reverse fluctuations were observed during the quarter shift, but that was major because of increased consumption during the holy month of Ramadan. Overall, declining prices were attributed to the high outputs by palm oil-producing countries, primarily Indonesia and Malaysia.

Europe

In Europe, the price trend for Crude Palm Kernel Oil mimicked that of its Asian counterpart. Prices fell throughout the first quarter because of easier and cheaper imports from Indonesia and Malaysia. But prices observed some upward wavering trend in the second quarter, owing to a rise in consumption and increased demands.

North America

Following the global price trend for Crude Palm Kernel Oil, prices remained low, swinging in the American market too. The availability of cheaper supplies kept the market prices down. But good supply-demand fundamentals supported the market sentiments.

Analyst Insight

According to the Procurement Resource, Crude Palm Kernel Oil prices are expected to remain volatile in the coming months. High inventories amid stable demands will likely impact the pricing fundamentals.

Crude Palm Kernel Oil Price Trend for the H2 of 2022

Asia

The price trend for Crude Palm Kernel Oil held firm during the third quarter with frequent fluctuations owing to the plateauing market fundamentals. The Indonesian government's ban on palm oil exports in early 2022 to control domestic inflation led to disastrous consequences. Domestic sales could not keep up with the production levels causing the prices to crash. Also, the rising awareness about the harmful effects of palm oil production on the environment has slashed the prices. With the high-cost inflation triggered by the Russia-Ukraine conflict, the market demand dwindled, considering the cautious wait-and-see attitude from the buyers. The Malaysian Crude Palm Kernel Oil averaged 72.99 cents/lb CIF New York.

The price of Rotterdam crude averaged 1659.83 USD/MT, while Sumatra Crude averaged 1719.82 USD/MT in Q3. The same trend continued in the fourth quarter and prices steadily declined. In Europe, the price of crude palm kernel oil averaged around 1070 USD/MT ( CIF Netherlands) in December’22.

Analyst Review

As per Procurement Resource, the prices of Crude Palm Kernel Oil will surge in the upcoming months. The torrential rainfall in key-producer countries like Indonesia and Malaysia led to a drastic decline in production levels. The low production amid the strengthening demand will aid the exporting nations in bringing down their inventories, furthering the price rise.

For the Second Quarter of 2022

Asia

Crude palm kernel oil prices (CPKO) recorded a new peak at the beginning of the said quarter. The supply disruptions in the black sea region and export restrictions caused the prices of vegetable oils to inflate globally. With Indonesia banning palm oil exports in April, CPKO prices soared.

However, the restrictions were lifted after a month, and the prices recorded a downward trend. The prices of Malaysian crude palm kernel oil went from 1811.19 USD/MT in May 2022 to 1554.50 USD/MT in June 2022, recording a total 14.17% decrease.

Latin America

In line with the Asian market, the price trend for CPKO followed a similar pattern, with the prices soaring around April due to supply chain disruptions and export ban and eased towards the end of the said quarter.

For the First Quarter of 2022

Asia

Crude palm oil (CPO) prices were projected to remain elevated in the short term, exceeding CGS-2022 CIMB's average CPO price projection of 4,100 RM/MT. On March 2, the Malaysia-delivered CPO price reached a record high of 8,076 RM/MT, partly owing to the Russia-Ukraine crisis. With the current state of the crisis and its effect on the worldwide supply of sunflower oil, particularly to the EU and India, demand for palm oil is projected to surge in the next quarter.

Latin America

The average price of a tonne was 685.31 USD in the first quarter of 2022 in Brazil.

For the Fourth Quarter of 2021

Asia

Despite a labour shortage, Malaysian CPO output increased considerably in November 2021 compared to the previous year. Following a rise to 1,300 USD/MT in November 2021, Malaysian benchmark CPO prices are expected to fall in 2022 due to a sharp increase in output. Meanwhile, Indonesia's monthly palm oil production continued to weaken in August-October 2021, compared to a year earlier, due to the lingering effects of poor fertiliser use and upkeep.

CPO prices were estimated to be at 4,700-4,900 MR/MT in December 2021. The prices are expected to rise in January and February 2022 before dropping to 4,600 MR/MT ($1,100.2) from March 2022 onwards.

The availability of palm oil may not improve until the first quarter of 2022, as Malaysia's manpower crisis persists, and high government tariffs drive consumers away from larger rival Indonesia, the world's biggest edible oil producer.

Europe

Due to a large cost rise for RSPO-certified palm and PKO, as well as their respective derivatives, BASF Personal Care Europe is compelled to drastically increase the Mass Balance premium for all palm (kernel) oleoderivatives in the EMEA region (Europe, Middle East, and Africa).

For First, Second and Third Quarters of 2021

Asia

For the first time since March 2008, Malaysian benchmark CPO spot prices surged to 1,300 USD/MT in November 2021, as palm oil output in Indonesia, the world's largest exporter, fell despite improved rains in the prior two years. In 2021, prices averaged around 1,070 USD/MT, similar to the 2011 high. Due to the lingering impacts of poor fertiliser use and upkeep in 2018-2019, when palm oil prices were low, Indonesia's monthly production continued to decline from August to October 2021, compared to a year earlier.

For the Year 2020

Asia

Crude Palm Oil (CPO) had an average price of 8,117 IDR/kg in 2020, with the maximum price of 9,373 IDR/kg in the fourth quarter. Palm oil prices had been reasonably consistent in 2020, with a lower price of 6,265 IDR/kg in the third quarter. However, because the Indonesian government declared in December 2020 that it would increase the export fee for CPO, the increase in its price had not been fully reflected in the price of palm oil processed products. The previous export cost was set at 55 per USD/MT, but beginning December 10, 2020, a new progressive export tax was applied, ranging from 55 to 255 USD/MT, depending on CPO prices.

Weak output and low inventory in Malaysia, strong prices and prognosis for soybean oil, a close alternative for palm oil, due to market expectations of dry weather impacting supply, and a recent jump in Indonesian palm oil export levies all bolstered prices in the second half of the year.

Foreign labourers, who make up around 70% of the workforce on Malaysian oil palm fields, were unable to reenter the country due to pandemic-related border closures in 2020. As a result, production was expected to drop to 18.3 MMT in 2020, down from 19.2 MMT in 2019.

Malaysian benchmark CPO spot prices reached 900 USD/MT for the first time since 2012 in December 2020 and have averaged approximately 810 USD/MT in Q4 2020. This was much higher than the 3Q20 average of 660 USD/MT.

Europe

On the back of increased demand and slowing production growth, European CPO prices rose to an average of 610 USD/MT including cost, freight, and insurance (CIF Rotterdam) in the first half of 2020.

Prices skyrocketed in the second half of 2020 and stayed high in the first half of 2021. In the Rotterdam region, the average price of CPO was 1,115 USD/MT, up 72% over the same period previous year. This is due to the surprisingly low production and ever-dwindling stockpiles.

North America

PKO usage is presently comparable to that of coconut oil, and PKO apparently held higher volumes during H1 2020, as more and more users switched to PKO instead of coconut oil. The average price of palm kernel oil (PKO) stood at 825 USD/MT in 2020.

Latin America

Colombia's total crude palm oil production in 2020 was 1,559,011 MT, up 2% from 2019. 52% of this production was earmarked for the domestic market, with the remaining 48% slated for export, totaling USD 515 million in sales.

Procurement Resource provides latest prices of Crude Palm Kernel 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.