Mintec proposes to launch two new sustainable Palm Oil Mintec Benchmark Prices

All Market Notes 14 February 2022

Mintec has launched two new daily Mintec Benchmark Prices assessments for the sustainable palm oil markets, effective Monday 14 February 2022. The initial proposal to launch this assessment was announced in a market note published on 11 January which can be found here and the decision to go ahead with the launch was communicated in a market note on 31 January which can be found here.

The full specifications for the new assessments are as below:

The assessments reflect the transactable value at 16:00 UK time for the prices of the above-mentioned products.
The palm oil industry has been striving to provide a more sustainable product over recent years due to a growing concern over deforestation associated with palm oil production, which has resulted in an increase in trading volumes of segregated and mass balance palm oil. The new assessments aid the industry in being able to compare crude palm oil prices directly with sustainable palm oil prices both on a fully segregated and mass balance basis. In addition, users now have access to quotes heard in the market as well as information on market evolution. These launches bring considerably more transparency to the sustainable palm oil industry which has historically been opaque.

Segregated Palm Oil

Segregated palm oil is palm oil which has come from palm plantations which have been certified to grow palm fruit on a sustainable basis. The palm fruit and oil must be kept segregated from non-sustainable palm fruit and oil during refining and transport.

Mass Balance Palm Oil

Mass balance palm oil is a mixture of sustainable palm oil and crude palm oil. An example of how this is created would be:

100 metric tonnes of Sustainable palm fruit and 100 metric tonnes of non-sustainable palm fruit enter a refinery to produce 100 metric tonnes of mass balance palm oil. Mass balance palm oil pricing and market information are important as a company’s journey from non-sustainable palm oil to 100% Sustainable palm oil typically moves through mass balance palm oil before arriving at segregated palm oil.

Please send any questions or comments on this market note to methodology@mintecglobal.com and clearly state which market note your comments relate to, and if comments are intended for publication by Mintec.

Mintec will acknowledge receipt of all comments by email.