By: Keith Bryan, Senior Purchasing Manager
I looked back and noticed a comment in our late 2019 publication that “the best cure for low prices, is low prices.” In 2021, we are going to replace “low” with “high.” Though timing remains a difficult guess, it seems likely that tropical oils, and all global fats and oils, will fall from the historic highs we have seen in late 2020/early 2021. Lauric oil prices may not have reached a tipping point yet, but in the next few months we should start to see the bullish fundamentals and psychology start to crumble in soy oil, palm oil, and subsequently other fats and oils.
Palm oil and palm kernel oil (PKO) production is almost certain to rebound in 2021, with acceleration of that starting in the next few months. There should be some stock building back to more comfortable levels in palm oil, and PKO price will likely fall to a smaller premium to palm oil than the ~$300 it is today. Coconut oil (CNO) production may not rebound as much as it was previously anticipated. The CNO-PKO spread is really one to watch and experts are calling it anywhere from <$100 to >$300, excluding PKO MB premium, for summer 2021.
P&G Chemicals remains committed to ensuring it sustains its long history of securing sustainable and competitive feedstocks, converting them into products that enable our customers to win in their markets.
Asia Market Update
There has been growth in e-commerce among consumers in the Asia market, along with a recovery of industrial demand, continuing the pressure on delivery times.
North American Market Update
P&G Chemicals is continuing to ensure supply during challenging times, while continuously improving and expanding our product offering.