Lachance Nutrition | Palm Oil Market Insight: Ten-year Price Trends and Future Outlook

Palm oil is one of the most widely used vegetable oils in the world and is widely used in food, cosmetics, household products and biofuel. As an important agricultural commodity, palm oil price fluctuations are not only affected by global market demand and production conditions, but also by political, environmental and economic factors. In the past decade, palm oil prices have experienced significant fluctuations. Lachance Group has a long-term interest in the palm oil market and hopes to make accurate market forecasts and provide solutions together with customers by analyzing price trends, market dynamics and related factors.

Overall price trends

From 2015 to 2024, palm oil prices have experienced significant fluctuations, highlighting distinct phases:

• 2015 to 2018: Period of Relatively Low Prices

- Prices in 2015 hit a low of approximately 1500-2000 MYR/ton;

- A rebound occurred between 2016 and 2017, with prices climbing to around 3,000 MYR/ton, driven by recovering demand and supply constraints.

• 2018 to 2019: Prices decline

- During this period, prices dropped back below 2000 MRY/ton, likely due to imbalances between supply and demand and weaker market dynamics.

• 2020 to 2022: Significant surge

- Prices soared sharply during the COVID-19 pandemic, peaking in 2022 at an all-time high of over 5000MYR/ton. This was fueled by: Disruption in supply chains, leading to reduced palm oil production; Increased demand for edible oils, especially during the pandemic as household consumption surged; Rising prices of alternative oils (such as soybean and sunflower oil), which further boosted palm oil demand.

• 2023 to 2024: Correction but stabilization at high levels

- Prices have eased from the 2022 peak but remain elevated in the 2500-3000 MYR/ton range, reflecting a market that is gradually stabilizing with balanced supply and demand.

2. Key Drives of Price Trends

• Global Supply and Demand

- Palm oil production is heavily concentrated in Malaysia and Indonesia. Factors such as climate variability, pests, and labor costs significantly influence supply.

- Population growth and economic recovery continue to drive long-term demand for vegetable oils.

• Competition from Alternative Oils

- Palm oil prices are closely linked to those of soybean, sunflower, and other oils. Fluctuations in their prices indirectly impact palm oil trends.

• Policy Changes

- Import restrictions in the EU and export tax adjustments in producer countries have had notable effects on pricing.

• Energy prices

- Palm oil is closely linked to the biofuel market and fluctuations in energy prices will also affect the demand for palm oil.

Looking ahead, the palm oil market will continue to be affected by multiple factors. Based on current trends and market data, global demand for palm oil is expected to continue to grow by 2025, especially from the Asian market. However, further stringent environmental policies may limit demand in some markets, especially in Europe. Therefore, palm oil prices will maintain a certain degree of volatility, but generally will fluctuate in a higher range.

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As a professional feed additive company, Lachance not only understand the market dynamics, but also provide specific response strategies based on customer needs. Amidst the high prices of palm oil, maximizing its utilization and avoiding even the slightest waste has become a critical strategy for feed and farming enterprises to safeguard their profit margins effectively.

The following is a study on the utilization of palm oil by Lachance bile acid:

(1) Experimental purpose: In the digestion process of fat in the body, lipase uses fat as substrate to generate fatty acids, which are then directly absorbed by the intestine. The purpose of this experiment is to evaluate the efficiency of lipase in degrading palm oil and soybean oil into fatty acids after adding bile acid to the fat.

(2) Experimental method: palm oil + lipase + buffer + bile acid, treated at 40℃ for 3.5 h, cooled to room temperature to determine the acid value of the product. The fatty acids generated after lipase degraded the fat were titrated with sodium hydroxide, and the amount of fatty acids generated was evaluated by the amount of sodium hydroxide used.

(3) Experimental results: Acid value detection of palm oil

After adding bile acid to palm oil, lipase was used to degrade it into fatty acids. The experimental results of acid value titration using sodium hydroxide are shown in Figure 2. The results show that bile acid has the effect of improving the efficiency of lipase in degrading palm oil to generate fatty acids. The acid value of the group without adding bile acid was 1.46 mg KOH/g. After adding bile acid, the acid value increases, and then with the increase of bile acid concentration, the digestibility of lipase continues to increase, and reaches the highest at 3.0 mg/mL, 5.44 mg KOH/g, and then tends to decrease. It has been reported that the bile acid content in animals is about 1.5 mg/mL, so supplementing about 0.2-0.5 mg/mL of bile acid in feed can improve the utilization rate of palm oil, and if the amount of bile acid added is increased to 1.0-1.5 mg/mL, that is, doubled on the basis of the current amount, the utilization rate of palm oil can be further improved.

As we reflect on a decade of dynamic changes in palm oil prices and their market impact, it's clear that the future of this essential commodity lies in maximizing its value and addressing the challenges posed by market volatility. While prices have demonstrated resilience and growth, rising demand and environmental pressures require innovative solutions. Lachance Group is committed to advancing the efficiency of palm oil utilization. Through our groundbreaking research on bile acid additives, we've demonstrated how scientific innovation can transform palm oil's digestibility and economic value.

Looking ahead, Lachance is dedicated to helping feed and farming enterprises thrive by offering customized strategies that optimize palm oil use, reduce waste, and secure profitability. Together, we can embrace the challenges of tomorrow and unlock the full potential of palm oil in sustainable agriculture.

Stay tuned for our upcoming innovations, and thank you for joining us on this journey to drive progress in the palm oil industry!