Malaysian Crude Palm Oil Market Soars High

Malaysia, the second-largest exporter of crude palm oil, has seen a significant price increase to $1146 per metric tonne, driven by geopolitical tensions, rising biofuel demand, and El Niño's impact on production. The Malaysian Ringgit's strength against the US dollar also contributed to this 44% year-to-date and 32% year-on-year surge. However, experts anticipate this rise to be temporary, with prices expected to stabilize by late 2024 as climatic conditions improve and India's higher tariffs on edible oils curb demand. This price hike affects industries like food, cosmetics, and biofuels, prompting companies such as Hindustan Unilever Limited to consider raising product prices. Prices are Indian Fee on Board (FOB) and may vary by region and tax systems.

The world’s second largest exported of crude palm oil Malaysia reported its highest oil prices on November 5 since March 2022. It surged to US $1146 per metric tonne or 5051.55 Malaysian Ringgit (MYR). This is a whopping 44% increase in year to date and 32% increase in year on year. These prices are highest since March 2022 when crude palm oil market reached new heights at US $1722 per metric tonne (7260.86 MYR). In just four weeks of October alone, the average weekly price rose by 3%. The steep price rise and high price volatility is linked to rising geopolitical tensions, especially in the middle eastern region. As tensions rise, investors are seeking safer investments, including biofuels, which has an increased demand for palm oil. An already tight product ship was further aggravated by El Niño’s adverse impact on production of palm crop. Other vegetable oils like soy, sunflower, and rapeseed, have also seen a price surge due to a tight supply in key regions of the US and ...