Palm Oil Dec '22 (KOZ22)

Description

Palm oil is an edible vegetable oil produced from the flesh of the fruit of the oil palm tree. The oil palm tree is a tropical palm tree that is a native of the west coast of Africa and is different from the coconut palm tree. The fruit of the oil palm tree is reddish, about the size of a large plum, and grows in large bunches. A single seed, the palm kernel, is contained in each fruit. Oil is extracted from both the pulp of the fruit (becoming palm oil) and the kernel (palm kernel oil). About one metric ton of palm kernel oil is obtained for every ten metric tons of palm oil.

Palm oil is commercially used in soap, ointments, cosmetics, detergents, and machinery lubricants. It is also used worldwide as cooking oil, shortening, and margarine. Palm kernel oil is a lighter oil and is used exclusively for food use. Crude palm oil and crude palm kernel oil are traded on the Kuala Lumpur Commodity Exchange.

Prices - The monthly average wholesale price of palm oil (CIF, bulk, U.S. ports) in 2022 rose by +11.7% yr/yr to 63.14 cents per pound, which was a new record high.

Supply - World production of palm oil in the 2022/23 marketing year rose by +5.1% to 77.559 million metric tons, a new record high. World palm oil production has grown sharply from the production level of 1.922 million metric tons seen back in 1970. Indonesia and Malaysia are the world's two major global producers of palm oil. Indonesian production in 2022/23 rose by +5.3% yr/yr to a record high of 45.500 million metric tons, and Indonesian production accounted for 58.7% of world production. Malaysian production in 2022/23 rose by +5.8% to 19.200 million metric tons, and Malaysian production accounted for 24.8% of world production. Other smaller global producers include Thailand with 4.2% of world production, Columbia with 2.3%, and Nigeria with 1.8%.

Trade - World palm oil exports in 2022/23 rose by +16.9% yr/yr to 51.218 million metric tons. The world's largest exporters of palm oil in 2022/23 were Indonesia, with a 55.5% share of world exports, and Malaysia, with a share of 33.0%. World palm oil imports in 2022/23 rose by +16.7% to 49.863 million metric tons. The world's largest importers were India with an 18.1% share of world imports and China with a 14.4% share.

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