RBD palm stearin was in premium to RBD palm olein by US$ 10 after being at zero in the previous week. RBD palm stearin prices eased by US$ 3 week-on-week average while RBD palm olein was lower by US$ 13. Stearin was offered between US$ 757.50-785/ton last week the highest in the year. Decreasing stocks and improving exports are supporting stearin prices to remain high for now. Malaysia RBD palm stearin is 25% lower than the same time last year as of the end of Sept and is likely to fall further as fractionation of RBD palm olein slowdown in Oct. Shortage of crude products in the domestic market from the high outflow of CPO in yet another month Oct and rising prices makes refining margins thin and production limited. Malaysia RBD palm stearin export in the first 25 days of Oct is down 27% versus the same time in Sept according to cargo surveyor Amspec, while Indonesia export was down 4.97% in Sept vs. Aug. With Malaysia retaining the zero export tax on CPO to the end of the year, we can expect refined product—RBD palm olein, stearin and PFAD prices will remain high.
Outlook: RBD palm stearin was offered at US$ 805/ton at market close, the highest in over a year. This week offers are expected to reach a high of US$ 820/ton at the back of bullish CPO Futures underpinned by rising headline exports.