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Palm oil prices slip, as soybean values edge up

1 RM (Malaysian Ringgit) = 0.22 USD
1 USD = 0.78 GBP

*Exchange rates calculated and market prices reported on August 1 2024

Crude Palm Oil

Average Palm Oil Export Prices

  • Indonesia
    $945 tonne (+$20/tonne)  

  • Malaysia
    N/A

Average Palm Oil Export Prices Aug 24

Source: USDA Foreign Agricultural Service

Malaysia palm market

A weakening of the Malaysia CPO Settlement Price continued into the second half of July. The average price for the month was RM3,962/tonne (US$872), which was 0.8% more than in June and 0.2% more than in July 2023.

The opening July price was RM3,989/tonne (US$878), with values peaking on the 3rd at RM4,095/tonne (US$901). Prices then slipped before a small rally, which peaked on the 22nd July at RM3,975/tonne (US$874). There was then a drop to RM3,904/tonne (US$859) on the 29th, with the last two days above RM3,910/tonne (US$860). The final quote of the month of RM3,915/tonne (US$861) was 44.9% less than the all-time high set in April 2022 and 0.9% more than the year before.

Malaysia CPO Settlement Price RM

Malaysia palm prices CPO Settlement Price RM Aug 24

Soybean oil

July 2024 Soybean Oil Export Prices $/tonne2024 Soybean Oil Export Prices $/tonne Aug 24

Larger vegetable oil production keeps prices in check

Large stocks of US and South American soybeans have weighed on the vegetable oil market, putting pressure on prices. In its July world supply and demand estimate, the USDA increased its world vegetable oil production figure to 228.05 million tonnes, which is 1.8% more than the year before and 4.5% more than in 2022/23. Use has also increased along with trade, which has meant that stocks were slightly smaller than a year ago at 30.37 million tonnes, but that only represents less than 50 days of supply.

In its most recent global vegetable oil report, the USDA’s forecast for 2024/25 was:

“The global oilseeds production forecast is raised approximately 300,000 tons to 686.1 million this month largely on a greater Canada rapeseed outlook along with higher U.S. cottonseed and peanuts. Reduced Russia sunflowerseed and U.S. soybeans lowered the net global production increase. Oilseeds trade is increased 500,000 tons on higher Canada rapeseed exports. Oilseed ending stocks are forecast slightly higher with greater rapeseed, peanut, and sunflowerseed carryout more than offsetting lower soybean ending stocks. Global crush is reduced on lower sunflowerseed utilization. Global meal trade is down almost 300,000 tons primarily on lower Russia and Ukraine sunflowerseed meal exports. Global vegetable oil trade is down slightly on lower Russia and Ukraine sunflowerseed oil exports. The projected U.S. season-average farm price for soybeans is down 10 cents to $11.10 per bushel.”

Average 2022/24 Soybean Oil Prices $/tonne

Average 2022-24 Soybean Oil Prices $/tonne Aug 24

Rapeseed oil
Average 2022/24 Rapeseed Rotterdam (Canola) Oil Prices $/tonneAverage 2022/24 Rapeseed Rotterdam (Canola) Oil Prices $/tonne Aug 24Sunflower oil
Average 2022-24 Sunflower Seed Oil Prices $/tonne

Average 2022-24 Sunflower Seed Oil Prices $/tonne Aug 24

Shipping Update

The rise in shipping costs may have peaked

The recent sharp rise in shipping costs could be over, but the price of transporting goods remains significantly higher than a year ago. In its latest report on the 25th July, the Drewry World Container Price was $5,806 per 40ft container, a drop of 2% on the week before, but 9.2% more than the month before but almost four times more than the year before.

Fears over attacks in the Mediterranean remain, which is altering shipping routes to avoid the area. However, the drought in the Panama Canal has eased and water levels are almost back to normal.

From the July 25th 2024 Drewry World Container Index report:

  • The composite index decreased 2% this week to $5,806 per 40ft container following a period of continuous increases since week 18 and has increased 268% when compared with the same week last year.    
  • The latest Drewry WCI composite index of $5,806 per 40ft container is 44% below the previous pandemic peak of $10,377 in September 2021, but it is 309% more than average 2019 (pre-pandemic) rates of $1,420.
  • The average composite index for the year-to-date is $3,886 per 40ft container, which is $1,108 higher than the 10-year average rate of $2,777 (which was inflated by the exceptional 2020-22 Covid period).
  • Freight rates from New York to Rotterdam increased 4% or $26 to $736 per FEU. Likewise, rates from Rotterdam to New York and Los Angeles to Shanghai rose 1% to $1,954 and $706 per 40ft box respectively. Conversely, rates from Shanghai to Los Angeles decreased 5% or $354 to $6,934 per 40ft box. Similarly, rates from Shanghai to New York dropped 4% or $399 to $9,213 per 40ft container. Likewise, rates from Shanghai to Genoa declined 1% or $82 to $7,645 per FEU. Meanwhile, rates from Rotterdam to Shanghai and Shanghai to Rotterdam remain stable. Drewry believes that spot rates have peaked, but continued shipping disruptions will keep a floor under the spot rates for some time.

Source: Drewry Supply Chain Advisors

Shipping update Aug 24

View Drewry shipping data here.

Disclaimer: The information in this document has been obtained from or based upon sources believed to be reliable and accurate at the time of writing. The document should be for information purposes only and is not guaranteed to be accurate or complete.