Oleic Acid Prices: For the Quarter Ending September 2023 | ChemAnalyst

In the third quarter of 2023, the pricing dynamics of Food Grade Oleic Acid underwent a notable transformation when delivered to Houston (USA). The cost, which stood at $1485 per metric ton in July, experienced a significant reduction to $1410 per metric ton by September, reflecting a substantial quarterly drop of 1.35%. This price shift was predominantly propelled by a global oversupply of Oleic acid, exerting a considerable influence on its market valuation. In response to this challenge and in an effort to mitigate potential losses, local traders strategically opted to decrease their price quotations, contributing to a more extensive decline in the market’s overall value. The significant decrease in Oleic acid prices can be traced back to a marked reduction in the cost of its primary raw material, Palm oil. This adjustment had a considerable impact on the overall production costs of Oleic acid in exporting countries, resulting in diminished prices. Furthermore, the European market, a pivotal palm oil importer, closely mirrored the pricing trends set by the primary palm oil exporting nations, particularly Indonesia and Malaysia. Consequently, the decline in Oleic acid prices reflects broader global market dynamics. Given that North America is a major Oleic acid importer and Malaysia is a significant exporter, the diminishing prices in competitive countries created a compelling incentive for domestic firms to lower their own prices to maintain competitiveness.

Asia Pacific

In the third quarter of 2023, the Oleic acid market in Asia Pacific witnessed a noteworthy and favorable shift. Prices for Food Grade Oleic Acid FOB Klang (Malaysia) dropped from $1260 per metric ton in July to $1130 per metric ton in September, signaling a substantial quarterly decrease of 3.20%. This price variation indicated a significant change, driven primarily by a seasonal slowdown in the manufacturing sector. Local suppliers had accumulated substantial inventories, possibly due to earlier optimistic demand expectations that did not materialize. This surplus supply exerted downward pressure on Oleic acid prices, posing challenges for suppliers to maintain their profit margins. Concurrently, there was a noticeable decline in the demand for Oleic acid. The decrease in palm oil prices in Malaysia had a pronounced impact on Oleic acid pricing, as Malaysian palm oil is frequently used in its production. The increased production of Malaysian palm oil resulted in oversupply in the global market, further exacerbated by declining futures prices due to stagnant terminal demand and adverse weather conditions affecting the Oleic acid market. However, in the middle of Q3, both refined and crude Oleic acid prices experienced an uptick, driven by rising palm oil prices as terminal oil demand improved and the palm oil market rebounded. Nevertheless, the Oleic acid market has since seen a retreat in prices in the domestic markets of major exporting countries.

Europe

In the third quarter of 2023, there was a substantial shift in the pricing of Food Grade Oleic Acid CFR Rotterdam (Netherlands). The price decreased from $1455 per metric ton in July to $1380 per metric ton by September, marking a notable quarterly decrease of 1.38%. This change in prices was primarily influenced by a surplus of Oleic acid on a global scale, significantly impacting its market value. To address this challenge and minimize potential losses, local traders strategically opted to reduce their price quotations, contributing to a broader decrease in the market’s overall worth. The significant decline in Oleic acid prices can be attributed to a significant reduction in the cost of its primary raw material, Palm oil, which markedly affected the overall production expenses of Oleic acid in exporting nations, resulting in reduced prices. Moreover, the European market, being a major palm oil importer, closely mirrored the pricing trends established by the leading palm oil exporting countries, namely Indonesia and Malaysia. Consequently, this decline in Oleic acid prices mirrors broader global market dynamics. Additionally, since the Netherlands is a major importer of Oleic acid and Malaysia is a primary exporter, the decreasing prices in competitive countries created a strong incentive for domestic companies to lower their own prices to maintain competitiveness.