Malaysian palm oil's premium to be short lived, to fade with Indonesian supply

Published 2023년 3월 28일

Tridge summary

The article discusses the unusual situation where palm oil prices have surpassed those of rapeseed and sunflower oil, a condition likely to correct as Indonesia, a major palm oil producer, eases export restrictions after Ramadan. This situation has led to a decrease in palm oil purchases for April shipments by Asian, African, and European importers, who are opting for alternative oils. The rise in palm oil prices, which are expected to return to a discount, is due to supply disruptions in Indonesia and Malaysia, while the prices of other oils have fallen due to increased supply in Europe and North America. The article also mentions that India and China, major palm oil buyers, have stocked up on the oil during this period, while Europe and the US have seen a drop in biodiesel demand due to an increase in used cooking oil supplies.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

MUMBAI (March 28): Palm oil's rare premium over rival rapeseed oil and sunflower oil is likely to be short-lived and it should start trading at a discount once top producer Indonesia eases export curbs after Ramadan, industry participants told Reuters. The premium has slowed down palm oil purchases for April shipments by key importers in Asia, Africa and Europe as refiners were replacing palm oil with rapeseed and sunoil, they said. Sunflower oil and canola oil prices have fallen by more than US$250 (RM1,100) per tonne so far in 2023 on higher supplies in Europe and north America. Palm oil prices during the period rose by US$20 per tonne as supplies were disrupted in Indonesia and Malaysia, the world's largest and second-longest producers, respectively, because of heavy rainfall. "As long as Indonesia is restricting exports, palm supplies will be artificially tight. When Indonesia returns in force as an exporter, palm will return to a discount," James Fry, chairman of commodities ...

Source: Theedgemarkets