Hedgepoint updates global outlook for palm oil market

Published 2024년 11월 11일

Tridge summary

Soybean oil prices have hit a two-year low, while palm oil prices have risen due to factors including changes in US fiscal policy and proposals in the 45Z Clean Fuels Tax Credit. The agricultural and biofuel industries are struggling to adapt. The US has increased imports of Used Cooking Oil and tallow from China and Brazil, respectfully, to be used as biofuel raw materials, negatively impacting local farmers and potentially leading to changes in US law. Meanwhile, the Thai government has banned crude palm oil exports due to low production, leading to a local price increase and potential reduction in palm oil use for ethanol. Malaysian palm oil exports have seen a rise, despite concerns about decreasing inventories and lower production expectations.

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

Original content

In recent weeks, soybean oil prices have reached their lowest level in the last 2 years, while palm oil prices have risen. There are some factors that can explain these movements. According to Ignacio Espinola, Senior Grains Analyst at Hedgepoint Global Markets, “While there are some important changes in US fiscal policy that could change market dynamics, there is other palm oil news that could also explain movements in futures. . The prices of soybean oil, palm oil, ethanol, used cooking oil and tallow are all interconnected. Recently, with the US 45Z Tax Credit scheduled to be implemented in January 2025, the agricultural and biofuel industries have had difficulty anticipating what will happen. “Many market participants complain about unclear rules of the game due to a new proposed change that could bring some modifications to the 45Z clean fuel tax, which should change business dynamics,” notes the analyst. The 45Z Clean Fuels Tax Credit was introduced in the Inflation ...

Source: Portal Do Agronegocio