April 3, 2023

Volatile palm oil market sees end-of-month rally, container shipping costs down 79% from March 2022

1 RM (Malaysian Ringgit) = 0.23 USD
1 USD = 0.81 GBP

*Exchange rates calculated and market prices reported on April 3

Crude Palm Oil

Average October Palm Oil Export Prices

• Indonesia
  $976/tonne (+$16/tonne)

• Malaysia
  $958/tonne (+$10/tonne)

Source: USDA Foreign Agricultural Service

Malaysia palm market

March proved to be a volatile month for Malaysia’s Crude Palm Oil (CPO) settlement price, seeing both multi-month highs and lows. On March 3, the market closed on a four-month high of 4,352 RM/tonne ($984.84), the highest price since November 3 at 4,361 RM/tonne ($986.88). By March 24, prices saw a low of 3,512 RM/tonne ($794.75), the lowest since a price of 3,426 RM/tonne ($775.29) on October 10.

The average CPO settlement price was also down from 4,033 RM/tonne ($912.65) in February to 3,935 ($890.47) RM/tonne in March.

Prices rallied in the last week of March, surging to 3,761 RM/tonne ($851.10) on March 31. According to reporting by Reuters, the sharp end-of-month increase was driven by “a buying frenzy” in the crude oil market.

Malaysia CPO Settlement Price RM

Soybean oil

February 2023 Soybean Oil Export Prices $/tonne

Soybean oil exports down  

Drought conditions continue in Argentina, lowering production for the world’s third-highest soybean producer. The country’s diminishing crop has had an impact on global soybean export prices, seeing significant increases in Argentina, the US and Brazil.
However, February soybean oil export prices have since declined. According to the USDA, the US soybean oil export prices were impacted by increased imports of rapeseed oil from Canada and low biofuel targets from the government. Soybean oil export prices from Brazil were also down. In recent figures released from Brazil’s Ministry of Agriculture, Livestock and Food Supply, the country is on track for a record soybean harvest of 5,564 million bushels this season – a 21% increase from last year.

Average 2021/23 Soybean Oil Prices $/tonne

Rapeseed oil
Average 2021/23 Rapeseed Rotterdam (Canola) Oil Prices $/tonne
Sunflower oil
Average 2021/23 Sunflower Seed Oil Prices $/tonne

Shipping Update

Drewry’s World Container Index decreases by 79% from March 2022

Since March 31, 2022, Drewry’s composite World Container Index decreased from $8,152 per 40-foot container to $1,717 on March 30, 2023. A significant impact on the drop in prices has been attributed to a decrease in consumer spending slowing down the trade of consumer goods.

All routes from Shanghai have trended downward in the last year. Destinations include Rotterdam, Los Angeles, Genoa and New York.

Source: Drewry Supply Chain Advisors

View Drewry shipping data here.

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.