US will continue to face rising palm oil prices in the coming months

In February 2025, the United States experienced a significant increase in palm kernel oil (PKO) import prices due to global supply disruptions and changing trade policies. At the same time, analysts say quotes will continue to rise further, Chemanalyst reported.

One of the main factors is a steady increase in overseas inquiries from end-user sectors, limited stocks at traders and higher prices due to expected lower supplies from a leading palm oil producer. This decline is tightening the pressure on prices. In addition, experts say the market is still not feeling the pressure from the imposition of the 40% biodiesel blending mandate in Indonesia, which will increase palm oil demand by 1.5 to 1.7 million tons annually.

As the US relies heavily on imports to meet its palm kernel oil demand, these international developments are likely to lead to greater volatility in the oils market. With an expected shortfall in palm kernel oil supply from key Southeast Asian producers, prices are expected to rise further in March 2025, impacting both businesses and consumers.

According to OleoScope, on 27/02/2025, the price of RBD palm kernel oil (FOB Malaysia) with February delivery was 1870.60 $/t, down 29.85 $/t from the previous value of 26/02/2025 (1900.45 $/t). This is the minimum value for the week.

The situation will be further complicated by the US government announcing plans to impose significant duties on a wide range of imports, especially from China. Although palm kernel oil is mainly sourced from Malaysia and Indonesia, broader changes in trade policy could indirectly affect import values and supply dynamics. The duties could prompt importers to seek alternative suppliers or change their purchasing strategies, which could lead to higher operating costs and the subsequent transfer of these costs to end consumers, experts said.

Tags: prices, Malaysia, palm oil, USA