Prices of Palm Kernel Oil: During the second quarter of 2023 | ChemAnalyst

For the Quarter Ending June 2023

North America:

Across the expanse of the North American region, Palm Kernel Oil (PKO) prices experienced a mixed market trajectory, beginning the second quarter with an upward climb. The initial part of Q2 saw moderate importing activity, while supplies from exporting nations, particularly Malaysia—a major player in the PKO market—remained constrained. This disruption in overall market trends persisted until April 2023. Transitioning into the mid-Q2 phase, prices saw a considerable decline on a global scale, influenced by lackluster regional trade activity and burgeoning warehouse stocks. Furthermore, numerous economists and business experts observed a decline in the US inflation rate. Although energy prices were dropping, underlying inflation remained significant, surpassing the Federal Reserve's target rate. With substantial inventory levels, domestic producers managed to meet local demand despite the challenges. However, food inflation in the US rose to 10.1% in May 2023 from 8.6% in April. As the second quarter concluded, Palm Kernel Oil prices in the United States stabilized, buoyed by a moderate surge in domestic demand, which balanced the overall supplies offered by merchants.

Asia Pacific:

In the expansive APAC region, Palm Kernel Oil (PKO) prices demonstrated a diverse price trajectory, particularly in Malaysia—a key exporter of PKO. The first half of Q2 2023 witnessed erratic price trends for palm kernel oil in Asia, with fluctuations occurring primarily near the upper end of the curve. Shifting into the quarter's midpoint, reverse fluctuations were observed due to heightened consumption during the holy month of Ramadan, leading to increased demand and constrained supply. Subsequently, PKO prices steadily decreased around the mid-Q2 mark, attributed to elevated outputs from major palm oil producers like Malaysia and subdued demand from suppliers. In May 2023, amid weaker demand, Malaysia's Manufacturing PMI dropped from 48.8 in April to 47.8, marking the ninth consecutive month of decline and the sharpest decrease since January 2023. New orders declined for the ninth straight month, with the latest drop being the steepest in three months due to demand constraints in both domestic and global markets. Supplier delivery times shortened for the fifth consecutive month, and purchasing activity reached its lowest point in nearly two years. As Q2 neared its end, the National Palm Kernel Oil Board reported a slower-than-expected increase in palm kernel oil inventories, attributed to reduced production and increased exports. Moreover, the Manufacturing Purchasing Managers Index (PMI) for June registered a YoY of 47.7, slightly lower than May's YoY of 47.8. The domestic retail sector maintained ample inventory to satisfy the region's overall demand.

Palm Kernel Oil Prices: https://www.chemanalyst.com/Pricing-data/palm-kernal-oil-1527

Europe:

Reflecting the trend observed in the Asia Pacific region, Palm Kernel Oil (PKO) prices in the European market during Q2 2023 also exhibited an initial increase. The beginning of Q2 saw across-the-board price rises. Preceding Ramadan, supply disruptions, primarily originating from exporting countries such as Malaysia—an essential PKO exporter to the Netherlands—affected the availability of cooking oils, including palm kernel oil, in the Netherlands. However, weaker market fundamentals led to significant price declines after April, culminating in a Q2 conclusion marked by fluctuating negative trends. For the current month, market demand receded due to consumer caution and high-cost inflation spurred by the Russia-Ukraine conflict. Approaching June, prices stabilized, striking a balance between the region's supply and demand dynamics. With merchants maintaining higher stockpiles, the overall demand was well-met, resulting in fewer quotations being placed in June.

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