Why did palm oil fall？

2025年10月6日 | admin | D4

Cause analysis of palm oil price decline

Recently, the price of palm oil futures market has dropped significantly, which has aroused widespread concern. Palm oil is one of the most important vegetable oils in the world, and its price fluctuation not only affects the interests of producers and consumers, but also has a far-reaching impact on the global oil market. The following are several key factors leading to the decline in palm oil prices.

1. Changes in supply and demand

The relationship between supply and demand is the core factor that affects the price of any commodity. Recently, palm oil production has increased, especially in major producing countries such as Malaysia and Indonesia. Due to suitable climatic conditions, palm oil production has greatly increased. At the same time, the slowdown in global economic growth has led to slower-than-expected demand growth, especially in major consumer countries such as China and India. The imbalance between supply and demand directly led to the decline in palm oil prices.

2. Competition for substitutes has intensified.

Palm oil faces competition from other vegetable oils in the fields of food processing and biofuels, such as soybean oil and rapeseed oil. With the technological progress and cost reduction, the market share of these substitutes has gradually increased, reducing the market demand for palm oil, thus lowering the price of palm oil.

3. The impact of international trade policy

Changes in international trade policies will also have an impact on palm oil prices. For example, some countries may impose restrictions or impose high tariffs on palm oil imports, which not only reduces the export volume of palm oil, but also affects the market demand expectation of palm oil, leading to a decline in prices.

4. Energy price fluctuation

The application of palm oil in the field of biofuels makes its price closely related to the energy market. When the price of crude oil falls, the competitiveness of biofuels weakens, which in turn affects the demand and price of palm oil. The recent fluctuation in the international crude oil market is also an important factor leading to the decline in palm oil prices.

5. Investor sentiment and market expectations

Investor sentiment and market expectations have an important impact on futures prices. When the market generally expects palm oil prices to fall, investors may sell their positions, further aggravating the price decline. In addition, the increase in global economic uncertainty may also lead to an increase in investor risk aversion and reduce investment in risky assets such as palm oil futures.

influencing factor incorporate relation between supply and demand Output increased and demand growth slowed down. Substitute competition Market share of other vegetable oils increased. international trade policy Import restrictions or tariff increases Energy price Falling crude oil prices affect demand for biofuels. Investor sentiment Investors sell their positions in anticipation of falling prices.

To sum up, the decline in palm oil prices is the result of many factors. Understanding these factors will help investors and market participants to better grasp the market dynamics and make more reasonable investment decisions.

(Editor: Zhang Xiaobo)