June 2, 2023
Crude palm oil hits 30-month low, global container rates continue to fall
1 RM (Malaysian Ringgit) = 0.22 USD
1 USD = 0.81 GBP
*Exchange rates calculated and market prices reported on May 31
Crude Palm Oil
Average April Palm Oil Export Prices
Malaysia palm market
Malaysia’s Crude Palm Oil (CPO) settlement price continues to decline, seeing a 30-month low of 3,201 RM/tonne on May 31. Prices have not been at this level since November 4, 2020, as the price of CPO was rapidly climbing during the COVID-19 pandemic.
Since November 2022, the average price of CPO has been in decline with an average of 4,170 RM/tonne in November and an average price of 3,508 RM/tonne in May 2023.
In the May Oilseeds Report from USDA, forecasted production for oilseed crops has outpaced forecasted consumption, contributing to the decrease in CPO. The market for CPO trends with similar oilseed crops that can be used interchangeably such as soybean oil.
From the report:
- Global oilseed production in 2023/24 is forecast to grow 7%, primarily on growth in soybean output in South America as well as sunflowerseed in the European Union, Ukraine, and Russia
- World rapeseed production is almost unchanged as gains in the EU, Canada, and China are offset by declines in Australia
- Oilseed production is projected at a new record of 672.0 million tons with soybean output forecast to rise 11% (40.0 million tons) to nearly 411.0 million
- Global oilseed consumption is forecast to rise 4% in 2023/24, driven by soybean crush recovery in Argentina and rising import demand from China
- Soybean crush and consumption are projected to account for most of the growth in global oilseed use
- Rapeseed consumption is forecast up 1%, while sunflowerseed processing is expected almost unchanged
Malaysia CPO Settlement Price RM
March 2023 Soybean Oil Export Prices $/tonne
Soybean oil exports down
As Argentina and Brazil progress through the 2023 harvest, soybean prices have weakened. According to the USDA, this is likely due to “an influx of Brazil soybeans in the global market” and a response to Argentina’s soy dollar program.
Average 2021/23 Soybean Oil Prices $/tonne
Average 2021/23 Rapeseed Rotterdam (Canola) Oil Prices $/tonne
Average 2021/23 Sunflower Seed Oil Prices $/tonne
Global container rates decline
From May 4 to May 25, Drewry’s composite World Container Index decreased an additional 4.4%. Compared to the same week in 2022, prices are down 78%.
From the March 25, 2023 Drewry World Container Index report:
- The latest Drewry WCI composite index of $1,685 per 40-foot container is now 84% below the peak of $10,377 reached in September 2021. It is 37% lower than the 10-year average of $2,688, indicating a return to more normal prices, but remains 19% higher than average 2019 (pre-pandemic) rates of $1,420
- The average composite index for the year-to-date is $1,859 per 40ft container, which is $828 lower than the 10-year average
Source: Drewry Supply Chain Advisors
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.