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

All Market Notes 11 January 2022

Mintec is proposing to launch two physical sustainable palm oil Mintec Benchmark Prices [MBP] for sustainable palm oil on a spot basis, effective 14 February 2022. Mintec is collecting feedback on this proposal from any market participant until 28 January 2022.

The proposed assessments, are as follows:

The proposed assessments would reflect the transactable value at 16:00 UK time for the above-mentioned MBP.

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 sustainable and mass balance palm oil. The proposed assessments would 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 would have access to quotes heard in the market as well as information on market evolution. This would 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 be growing 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 transportation.

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 is 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.

If you have any feedback or suggestions on this proposal, please send this to methodology@mintecglobal.com by Friday, 28 January 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.