Palm oil discount to soybean oil at 6-week high as Indonesia lifts export ban

Palm oil’s discount to soybean oil reached a six-week high of $282.21/mt June 14 as benchmark palm prices softened after Indonesia lifted an export ban and stepped up palm shipments.

Palm oil was last valued at a discount of $191.35/mt to CBOT soybean oil on May 11, S&P Global Commodity Insights data showed.

The benchmark Malaysian crude palm oil price has tumbled 21% from its peak in March, when it traded at Malaysian ringgit 1,679.40/mt.

A persistently wide discount between palm oil and soybean oil increases palm’s competitiveness against rival bean oil.

Indonesia approved export permits for an additional 1.16 million mt of palm oil products June 13.

In a series of adjustments in export levies and changes to tax rules, Indonesia lowered its maximum export levy to $200/mt from $375/mt effective June 13 until end July under its palm export acceleration program. The levy will be raised to $240/mt from August when the crude palm oil price hits at least $1,500/mt.

For many months prior to June, palm oil had maintained a relatively high premium over bean oil, hitting a record premium over $400/mt in February following Russia’s invasion of Ukraine, which disrupted supplies of sunflower oil, sending buyers scrambling for edible oil substitutes including palm oil.

Tags: ban, shipments, export, soybean oil, Indonesia, prices, Malaysia, palm oil