Malaysian palm oil buyers switch to cheaper rival oils, hampering price recovery

Published 2024년 2월 8일

Tridge summary

The increase in palm oil prices is likely to be restrained due to the plentiful supply of cheaper alternatives like soyoil and sunflower oil, driven by a record South American soybean crop. This has led to a shift in buying patterns in India, the world's largest vegetable oil importer, with a reduction in palm oil imports and an increase in soyoil. Higher freight costs have also made palm oil more expensive for European buyers. Despite these factors, industrial demand for palm oil is expected to remain stable.

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

Original content

MUMBAI (Feb 9): The rebound in palm oil prices is likely to be capped by abundant supplies of rival soyoil and sunflower oil, "soft" oils that are available at discounts to tropical palm oil for the first time in more than a year. Benchmark Malaysian palm oil futures have risen nearly 5% in 2024 after losing 11% last year. Primary competitor soyoil typically trades at a premium to palm oil, but a record South American soybean crop has driven down prices, and buyers are taking more soyoil shipments. Soft oils production is rising while palm oil production is falling, driving divergent price trends, said Vipin Gupta, chief executive officer of Dubai-based trader Glentech Group. "Higher prices are pushing away buyers from palm oil, which will limit the price rise," Gupta said. Crude palm oil (CPO) imports are being offered at about US$930 (RM4,436) a metric tonne, including cost, insurance and freight (CIF), in India for March delivery, while soyoil is offered around US$915 a tonne ...

Source: Theedgemarkets