In a follow-up story as reported by Mintec here, on 19th April, the European Parliament adopted a new law that is intended to fight global deforestation for which exporters of products such as cattle, cocoa, coffee, palm oil, soya and others will have to prove via documentation that the commodity has not been party to deforestation. The rules are fairly complex, and it is not yet fully understood by the market what impact this may have on the importation of goods into the EU. However, from interacting with industry sources, Mintec ascertained that very few large palm oil players are particularly concerned about their continued exports into the EU as they “have documentation at the ready to prove a lack of deforestation.” Furthermore, Malaysia suggested that its Certified Sustainable Palm Oil scheme (CSPO) already adheres to the standards required by the EU, potentially meaning that very little changes, despite concern within the market.
The MBP for Crude Palm Oil CIF Rotterdam [Mintec Code: CPOR] was assessed at $999.5/mt, down $30/mt on the week of 27th April. The slight decline was partly due to sellers being willing to offer the product for less to generate market action as players took a ‘wait-and-see' approach over the week as key price reference markets such as the Bursa Malaysia (BMD) were closed. Meanwhile, the Mintec Benchmark Prices [MBP] for Soybean Oil FCA Netherland [Mintec Code: SBOR] was assessed at €920/mt, unchanged on the week, on the same day. Limited demand for soyabean oil due to an ample supply of alternative oils (sunflower oil and rapeseed oil) has continued to pressure soybean oil prices in the EU.
