This document summarizes the key factors influencing annual prices of RBD Olein, a type of palm oil, from 2012-2018. Production and exports of Malaysian palm oil fluctuated over this period, affecting stock levels. Palm oil prices largely track international soy oil prices and crude oil prices. The document analyzes how events each year, like US droughts, El Nino, and the US-China trade war, impacted supply and demand factors in ways that drove annual average RBD Olein prices higher or lower.

1. Performance of RBD Olein
Prices and underlying factors
Synopsis of Major events which has driven the annual price changes
Price under consideration : RBD Olein 1 M Forward Prices FOB
Malaysian Ports

2. Basic Fundamentals of Malaysian Palm Oil
18.8
19.2
19.7
20.0
17.3
19.9
19.5
17.58
18.11
17.26 17.43
16.02
16.55 16.59
15.0
16.0
17.0
18.0
19.0
20.0
21.0
2012 2013 2014 2015 2016 2017 2018
Malysian Palm Oil Production and Exports (MMT)
Production Exports
1.57
1.60
1.64
1.66
1.44
1.66
1.63
1.78
1.67
1.36
1.40
1.47
1.83
1.81
1.20
1.30
1.40
1.50
1.60
1.70
1.80
1.90
2012 2013 2014 2015 2016 2017 2018
Palm Oil Stocks MMT
Average Monthly Stock Number Closing Stock for CY
• The exports has been declining till 2016 and then recovered in subsequent years
• Production is almost stagnant with 2016 fall mainly due to el nino
• Average monthly stocks in a CY is in accordance with the production figures
• However Dec end stock has recovered strongly after 2016
Note: MY for Palm oil is Oct to Sep

3. Annual Average Price
action for the RBD Olein
• Though the stocks has been rising
marginally the prices fell sharply, which is
due to falling soy complex prices
• Soy complex prices are on declining trend
after the US drought of 2012
• US Soy complex forms benchmark in the
international soy prices
• Palm mostly is a price taker as soy oil a by-
product competes for its share in
international veg oilmarket
971.7
801.5
766.8
595.5
666.0
684.3
582.8
500.0
600.0
700.0
800.0
900.0
1000.0
2012 2013 2014 2015 2016 2017 2018
RBD Olein Daily Average Price in a
CY FOB Malysian Ports ($/T)

4. Soy Complex price
• Soybean complex prices has been on declining trend since
2012
• Rising soybean crush over rising exports demand of pork
and soymeal has resulted in rising production of soybean
oil which wasn’t disposed with the same rate as there has
been limited support from US govt towards biodiesel
industry

5. Crude oil Prices
• Rising global inventory has resulted in crashing crude oil prices
• In the last few years OPEC decision on cutting production has
resulted in recovery but still neve achieved the highs of 2013 and
2014
• Crude oil prices determines the voluntary blending of biodiesel
produced from soy or palm if the economics of blending permits

6. Diagnosis of annual
average price action
of palm oil
• 2012: US drought, fall in soybean production
• 2013: Strong recovery in soybean production and
improving soybean stocks as well as rising palm oil stocks
• 2014: Same as 2013 and falling crude oil prices
• 2015: same as 2014
• 2016: El nino resulted is sudden fall in production of
palm oil and stocks
• 2017: Recovery in palm oil production and rapid surge
in palm oil stocks
• 2018: US China trade war accompanied by all time high
US soyben production resulted in US stocks to achieve all
time high. Palm oil stocks also surged to all time high

7. To be
Updated