Pressure on palm oil prices amid tariff uncertainty
1 RM (Malaysian Ringgit) = 0.24 USD*
1 USD = 0.75 GBP
*Exchange rates calculated and market prices reported on May 5, 2025
Malaysia palm market
Prices at seven month low in April
The Malaysia CPO settlement price fell during April, with uncertainty about US tariffs and larger stocks driving the market. The month began at RM4,417/tonne (US$1060), with the high for the month the day after at RM4,512/tonne (US$1083). By the 18th April prices had fallen below the RM4,000/tonne (US$960) mark for the first time since September last year.
The last price of April was RM3,913/tonne (US$939), which represented an 11.4% drop on the month. The price was 24.6% less than the recent peak in November 2024, but 2.6% higher than the value the year before. It was also 44.9% lower than the all-time high set in April 2022.
Malaysia CPO Settlement Price RM
Vegetable oil
Reduced production in China and the EU
In its most recent global vegetable oil report, the USDA’s forecast was:
“Global oilseed production is lowered on downward revisions to the China cottonseed-to-lint ratio and reduced EU rapeseed and sunflowerseed production. Oilseed trade is higher on significant Canada rapeseed exports. Global crush is increased with Brazil soybean and China rapeseed utilization most prominent. Global oilseed carryout is higher, largely on an upward revision to 2023/2024 Brazil soybean production. USDA reviewed 2024 Brazil disappearance data which led to the higher production estimate. Disappearance data includes variables such as trade, crush, seed and residual use, and stocks. While stocks at the end of the local year (December 2024) were reduced, stocks at the end of the marketing year (September 2024) were raised. In the USDA FAS Production, Supply, and Distribution (PSD) database, the local year (January-December) is denoted as “Oilseed, Soybean (Local)” and the marketing year (October-September) is “Oilseed, Soybean.” Global protein meal trade is increased on higher shipments of soybean meal from Brazil and Argentina, more than offsetting lower Canada rapeseed meal exports. Global vegetable oil production is lower on reduced palm oil production in Southeast Asia. Global vegetable oil trade and stocks are also lower on reduced palm oil. The projected U.S. season-average farm price for soybeans is unchanged at $9.95 per bushel.”
Average global palm oil prices in April 2025 were 6.9% less than March at US$994/tonne, according to the World Bank. That price was 6.3% more than the year before, Soybean oil prices were up 10.4% in the month and by 16.4% over the year to an average of US$1,116/tonne. Rapeseed oil prices rose 5.3% in the month and by 18.7% over the year to US$1,256/tonne, with a 26.0% increase in the April 2025 sunflower oil prices compared to the year before at US$1,223/tonne, which was a 0.7% drop over the month.
Rapeseed oil
Average world rapeseed oil price in US$/tonne
Sunflower oil
Average world sunflower oil prices in US$/tonne
Shipping update
Prices fall amid disrupted trade
Shipping prices are at their lowest for more than a year as global trade is disrupted by trade disputes. The most recent World Container Index price from consultancy is US$2,091 per 40-foot container. That was 5.3% down on the month, 22.9% less than the year before and 74.7% lower than the peak in July 2024 when values spiked because of hostilities in the Middle East.
From the 1st May Drewry World Container Index:
- The Drewry WCI composite index decreased 3% to $2,091 per 40-foot container, 80% below the previous pandemic peak of $10,377 in September 2021. However, the index was 47% higher than the average $1,420 in 2019 (pre-pandemic).
- The average YTD composite index closed at $2,811 per 40-foot container, $82 lower than the 10-year average of $2,893 (inflated by the exceptional 2020-22 Covid period).
- Freight rates from Shanghai to Rotterdam decreased 5% or $110 to $2,202 per 40-foot container and those from Rotterdam to Shanghai and Shanghai to Genoa decreased 4% to $464 and $2,889 per 40-foot container, respectively. Following the trend, rates from Shanghai to New York and Rotterdam to New York decreased 3% to $3,500 and $2,041 per 40-foot container, respectively. Also, rates from Los Angeles to Shanghai decreased 2% or $16 to $689 per 40-foot container and those from Shanghai to Los Angeles reduced 1% or $27 to $2,590 per 40-foot container while rates from New York to Rotterdam increased 2% or $17 to $842 per 40-foot container. Drewry expects rates to continue declining in the coming week due to uncertainty stemming from reciprocal tariffs.
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.