Global Palm Oil Prices
Global Crude Palm Oil Prices
Global Palm Oil Prices Overview
The global market for crude palm oil (CPO) continues to evolve, reflecting dynamic trends shaped by production capacities, export demand, and geopolitical conditions.
Current Price Trends:
As of December 2024, the average price of crude palm oil in Malaysia is MYR 4,577 per metric ton. Using an exchange rate of 1 USD = 4.40 MYR, this converts to approximately USD 1,040 per metric ton.
Malaysia, the second-largest producer after Indonesia, accounts for 33% of global palm oil production, making its prices a benchmark for the industry.Market Developments:
- Production Rates: Indonesian and Malaysian output has been steady but limited due to weather challenges. The impact of El Niño has affected yields, keeping supply tight.
- Export Demand: Major importing nations like India and China have shown increased demand, driven by the rising need for edible oils and biofuels.
- Geopolitical Factors: Trade restrictions and export taxes imposed by key producers have further influenced global pricing.
Palm Oil Price Drivers and Regional Market Analysis
Crude palm oil prices are driven by multiple interconnected factors:
Weather Conditions:
- El Niño and La Niña: These weather patterns significantly influence palm oil yields. El Niño, prevalent in 2024, has led to lower-than-average rainfall in Southeast Asia, directly reducing output.
Export Demand Trends:
- India remains the largest importer, with increasing demand for edible oils and biofuel feedstocks.
- China’s reopening after prolonged restrictions has boosted imports, further tightening global supply.
Supply Chain Dynamics:
- Malaysia and Indonesia, responsible for 85% of global palm oil supply, face logistical challenges, including labor shortages and shipping constraints.
- Regional Breakdown of CPO Prices (December 2024):
- Malaysia: MYR 4,577/MT (USD 1,040/MT)
- Indonesia: Typically 5-10% lower than Malaysian prices due to export taxes.
Global Palm Oil Prices Forecast
Short-Term (1-3 Months):
- Prices are expected to remain stable at MYR 4,500-4,700/MT (USD 1,020-1,070/MT), driven by seasonal demand and steady production levels.
Medium-Term (6-12 Months):
- As El Niño effects diminish, output is expected to recover slightly. Prices could drop to MYR 4,200-4,500/MT (USD 950-1,020/MT).
Long-Term (1-5 Years):
- Rising global demand for biofuels and processed food is likely to sustain upward pressure on prices, with projected averages of MYR 4,800-5,000/MT (USD 1,090-1,140/MT).
Key influencing factors include government policies, such as Indonesia’s biodiesel mandate and sustainability certifications, which may impact production costs and export dynamics.
Click here to check the global coffee price.
Palm Oil Prices FAQs
In December 2024, the average global price of crude palm oil (CPO) in Malaysia was MYR 4,924.50 per metric ton, equivalent to $1,109 USD with an exchange rate of 1 USD = 4.44 MYR. This represents an increase compared to November, driven by global supply constraints and rising demand.
- Weather Conditions: The impact of El Niño reduced production in Malaysia and Indonesia.
- Export Demand: Increased imports by India and China due to rising demand for edible oils and biofuels.
- Trade Policies: Export restrictions in producing countries further tightened global supply.
- Producers: Higher prices boosted their revenues, but logistical challenges and environmental compliance costs remain significant hurdles.
- Consumers: The higher cost of crude palm oil has increased prices for food and industrial products, leading consumers to shift toward alternatives like soybean and rapeseed oils.