Buyers swap palm oil for cheaper rivals, making it difficult to recover prices in Malaysia

Palm Kernel Oil
Market & Price Trends
Published Feb 9, 2024

Tridge summary

The recovery of palm oil prices is expected to be constrained due to an oversupply of soybean and sunflower oils, which are now cheaper than palm oil for the first time in over a year. This is a result of a record soybean harvest in South America that has driven down prices. In India, the largest importer of vegetable oil, there is a shift from palm oil imports to soybean oil due to cost-effectiveness. Additionally, palm oil has become more expensive for European buyers due to increased shipping costs.
Disclaimer: The above summary was generated by a state-of-the-art LLM model and is intended for informational purposes only. It is recommended that readers refer to the original article for more context.

Original content

By Rajendra Jadhav MUMBAI (Reuters) - The recovery in palm oil prices is expected to be limited by abundant supply of soybean and sunflower oils, products that are available at discounts to tropical palm oil for the first time in more than a year. Malaysia's benchmark palm oil futures are up nearly 5% in 2024 after losing 11% last year. [POI/] Top competitor soybean oil typically trades at a premium to palm oil, but a record soybean harvest in South America has lowered prices and buyers are accepting more soybean oil shipments. Production of "soft" oils is rising, while palm oil production is falling, leading to divergent price trends, said Vipin Gupta, CEO of Glentech Group, a Dubai-based trading company. “Higher prices are driving buyers away from palm oil, which will limit price increases,” Gupta said. Crude palm oil (CPO) imports are being offered at around $930 a tonne including cost, insurance and freight (CIF) in India for March delivery, while soybean oil and sunflower oil ...
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