Last week, the ICE Brent Crude Oil price for December 2023 settlement peaked at nearly $94 per barrel, and slid down to $91/barrel on 2023-10-02. This price fluctuation was primarily attributed to a steep drop in U.S. crude oil stocks, compounded by worries about tight global supplies.
Meanwhile, lower buying interest from China was seen due to the public holidays in the country.
Cooler energy prices and lower Chinese demand led to a decline in the prices of BMD palm oil this week. The Malaysian crude palm oil spot settlement price on BMD, as of October 2, 2023, dropped to €733 ($774) per metric ton, down from €736 ($785) per metric ton during the same period the previous week.
In contrast, cash prices for crude palm oil in the European market have seen an upward trend since last week. The Vesper West EU Forward Price Index for Crude Palm Oil, as of October 2, 2023, increased to €880 ($930) per metric ton (CIF Rotterdam, December delivery), marking an increase from €866 ($922) per metric ton during the same period of the previous week.
The upward trend was due to several factors: higher export numbers coming from Malaysia, neutral neutral SPOMA (South Peninsulat Palm Oil Mills Association) data, and strong discounts in relation to soybean oil (see figure 1).
Figure 1: Vesper Forward Price Index for Crude Palm Oil and Crude Soybean Oil West-EU
Key data highlights:
- Malaysia palm oil export 1-30 Sep vs. 1-30 Aug (in mt): Amspec – 1,235,560 vs. 1,171,998 ( +5.4%); ITS – 1,299,187 vs. 1,201,488 (+8.1%)
- SPPOMA 1-30 Sep 2023 : Production:-0.20%, FFB (yield) : -1.49%, OER : +0.25%
- Indonesian palm oil GAPKI data July vs. June (mmt): stocks at 3.6 vs. 4.5, production at 4.77 vs. 4.2, exports at 3.52 vs. 3.45
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