Palm oil prices strengthen throughout first half of October
1 RM (Malaysian Ringgit) = 0.23 USD
1 USD = 0.77 GBP
*Note, exchange rates are for October 15 2024
Malaysia’s Crude Palm Oil settlement price hit six-month highs in the first half of October. The price began the month at just above the RM4,000/tonne (US$920) mark, which was 2.9% more than the month before. They then started to gradually climb reaching a peak of RM4,349/tonne (US$1000) on the 14th October, the highest value since the 9th April 2024.
Prices did slip on the 15th of October, but showed signs of rebounding in trading on the 16th.. The price of RM4,260/tonne (US$980) on the 15th was 12.7% more than the year before, but 40.0% lower than the all-time high of RM7,104/tonne (US$1634) in April 2022
Malaysia CPO Settlement Price RM
Analysis: Alternative vegetable oils put some pressure on palm oil
There was some pressure on palm oil prices in the middle of the month. Higher crude oil prices had given palm some support, but values have fallen in recent days. More importantly, so have the price of alternative vegetable oils. US soy oil prices have dropped as US growers harvest a larger soy crop. Chinese veg oil prices are also down.
Crude oil prices, which influence palm oil values as it can be used for biofuel, are being governed by the threat of an escalation in the conflicts in the Middle East and Ukraine. That happened earlier in the month.
Strong Malaysian palm oil exports have supported prices. There are estimates that monthly first-half exports rose by as much as 15% compared with the same period in September.
Malaysia has said that it is providing help to smaller scale palm oil growers to help them meet new EU regulations on forest management. A new law due in at the end of this year will require companies selling products in the EU to prove their supply chains do not contribute to the destruction of forests.
Almost 30% of Malaysia’s palm oil production is from 450,000 small-scale growers. Recently the country’s plantation and commodities minister Johari Ghani said that the government had put initiatives in place to help smaller growers make the transition to EU compliance, saying that it is important they are not adversely impacted by the new law. The Malaysian government has asked the EU to delay implementation of the new law to protect small farmers and ensure fair trade.
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.