Weekly Product Updates

W8 Palm Oil Update: EU's Vegetable Oil Imports Declined in 2023/24 MY, Malaysia Faces Palm Oil Export Challenges

RBD Palm Oil
Published Feb 28, 2024
In W8 in the palm oil landscape, the EU saw a 6% YoY decline in vegetable oil imports from Jul-23 to mid-Feb-24, with significant drops in palm and rapeseed oil imports but increases in soybean and sunflower oil. Malaysian palm oil exports decreased by 10.8% to 17% MoM in early Feb-24, influenced by a drop in soybean oil prices. India experienced an 8.4% MoM decline in vegetable oil imports in Jan-24, particularly in palm and sunflower oil, while soybean oil imports increased. Pakistan's imports of edible oils, including soybean and palm oil, dropped significantly in the first seven months of the 2023/24 MY. Meanwhile, Thailand faces adverse weather conditions affecting its palm oil industry, with expectations of price increases due to reduced domestic production caused by El Niño conditions.

EU Vegetable Oil Imports Dipped in 2023/24 with Notable Declines in Palm and Rapeseed Oil

From Jul-23 to mid-Feb-24, the European Union (EU) imported approximately 4.15 million metric tons (mmt) of vegetable oils, marking a 6% year-on-year (YoY) decline. This decrease is attributed to a significant drop in imports of palm and rapeseed oil by 20% and 10%, respectively, while imports of soybean and sunflower oil increased by 14% and 21%. Indonesia was the primary source of palm oil imports to Europe, while Ukraine dominated in supplying soybean, rapeseed, and sunflower oil.

Palm Oil Exports from Malaysia Dipped Amidst Soybean Oil Price Decrease

Between February 1 and 15, Malaysian palm oil product exports declined by 10.8% to 17% month-on-month (MoM), amounting to 492.65 thousand metric tons (mt). This decrease follows a drop in soybean oil prices on the Chicago Board of Trade by 0.3%, influencing palm oil prices due to competition in the global vegetable oil market. Despite robust exports leading to a decline in palm oil stocks towards the end of Jan-24, the industry faces limitations in price recovery due to ample supplies of rival oils like soybean and sunflower, available at a discount. Analysts anticipate a potential continuation of the downtrend in palm oil prices, with projections ranging between USD 783.97 and 788.15/mt.

India's Vegetable Oil Imports Dip in Jan-24 with Palm and Sunflower Oil Leading the Decline

India's import of vegetable oils decreased by 8.4% MoM compared to Dec-23, totaling 1.2 mmt, with palm oil dropping by 12.4% to 783 thousand mt and sunflower oil by 15.6% MoM to 220 thousand mt, while soybean oil saw an increase of 23.7% MoM to 18.9 thousand mt. Imported crude palm oil (CPO) in India is priced at USD 932/mt Cost, Insurance, and Freight (CIF) for Mar-24 delivery, while soybean and sunflower oils are offered at USD 919/mt and USD 925/mt CIF, respectively.

Edible Oil Imports in Pakistan Witness Steep Declines in 2023/24 MY

During the first seven months of the 2023/24 MY, imports of edible oils, including soybean and palm oil, experienced significant declines compared to the same period the previous year. Palm oil imports decreased by 34.14% YoY, with over 1.735 mmt imported worth USD 1.611 billion, compared to 1.927 mmt valued at USD 2.446 billion in the same period last year, according to data from the Pakistan Bureau of Statistics.

Price of Palm Oil FFB Rose in Southwest Aceh, Indonesia

The Indonesian Palm Oil Farmers Association (APKASINDO) in Southwest Aceh reported an increase in the price of fresh fruit bunches (FFB) for palm oil at the factory level, reaching USD 0.13 per kilogram (IDR 2,110/kg) at PT Mon Jambee and USD 0.13/kg (IDR 2,080/kg) at PT SMS (Sawit Mas Sejahtera). This marks a rise of USD 0.0019/kg (IDR 30/kg) compared to W5. The APKASINDO chairman attributed this increase to various external and internal factors, including CPO prices at export ports like Belawan Medan and Dumai Riau, along with transportation costs incurred by palm oil factory entrepreneurs (PMKS) to transport CPO to Belawan Medan.

Thailand Faces Agricultural Challenges Due to Severe Weather, Impacting Palm Oil Sector

Thailand is grappling with severe weather events, including prolonged drought due to the ongoing El Niño phenomenon, leading to reduced rainfall and higher temperatures. Additionally, the potential onset of La Niña threatens further agricultural damage, impacting food security and causing shortages in related industries. Domestic CPO prices are closely tied to global market trends, with expectations of an increase in 2024 due to rising global demand and reduced domestic production caused by El Niño conditions. Consequently, palm oil prices in Thailand are anticipated to reach USD 0.88/kg (THB 31.70/kg), with fresh palm fruit priced at USD 0.16/kg (THB 5.70/kg).

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