Here’s Why the Global Lauric Oils Market is Heating Up

Lauric oils prices have remained at near parity to palm oil in 2023; will this change? Numerous key factors seem likely to support increased demand for lauric oils.

First, soft demand from the oleochemical and traditional food sectors negatively impacted demand early this year. With the price of palm oil serving as a floor for prices of all fats and oils, historically, the prices of lauric oils would not fall below palm oil, as they have recently, and would have an average premium of $200-$300 per ton over palm oil.

Furthermore, coconut oil (CNO) continues to rise in demand in the Philippines, as pricing is quite competitive with imported palm olein, while Copra production for CNO is steady. Additionally, production for palm oil and palm kernel oil (PKO) is at a seasonal low during this first half of 2023. Sellers of lauric oils are eagerly anticipating resurgence in demand from China. As well, global supplies of fats and oils are rebuilding from the low point in late 2021, and oilseed stocks are expected to rebuild for the next few years from the low point in 2022.

The biofuel trend should increase consumption of fats and oils in that sector each year. For example, Indonesia has increased the mandate for biodiesel usage to 35%. The U.S. Department of Agriculture has shared that by the middle of this decade, soybean oil likely will account for about half of total U.S. biodiesel production made from methyl esters. Rising demand for natural cleaning and personal care products should also help keep demand for lauric oils strong.

At P&G Chemicals, we’ve had our eyes on supply and demand for lauric oils since 1837, when our group established itself as the force behind P&G’s high-quality products. From facilitating the manufacturing of nineteenth-century soaps and candles to implementing our modern supply chain and sustainability initiatives, we’ve continued to respond to evolving market needs. Today, we are a global supply leader delivering solutions and creating value for our customers and suppliers in over 70 countries. Look to us regularly for more information and insights on factors driving the global oleochemicals sector.