As December began, Fatty Alcohol prices increased modestly in Malaysia, with Germany observing a similar upward trend in prices.

Fatty Alcohol C12-C14 FOB Johor prices saw a slight increase of 1.6% in the first week of December, a much smaller rise compared to the 4.2% surge observed in the preceding week. The rise in palm oil futures, driven by supply concerns in Malaysia and policy changes such as B40 in Indonesia created upward momentum for Fatty Alcohol prices. However, the bullish trend in palm oil prices has made fatty alcohol expensive for international buyers making them more hesitant to buy Fatty Alcohol at this price point. This supply imbalance has limited the expected rise in Fatty Alcohol prices. As a result, Fatty Alcohol C12-C14 FOB Johor prices settled at USD 2870/MT for the week ending December 6th.

One major factor influencing palm oil prices was the disruption in supply caused by severe floods in Peninsular Malaysia. The region experienced some of the worst flooding in a decade, which caused substantial damage to palm oil plantations. The floods have already disrupted harvesting and transportation, with milling operations also delayed. These challenges raised concerns over reduced palm oil production, which has contributed to upward price pressure as reflected in Fatty Alcohol prices. As a result, buyers were bracing for a lower palm oil supply, which typically translated to higher prices for Fatty Alcohol in the Fatty Alcohol market.

Additionally, Indonesia’s move to raise its export tax and levy in December has impacted the price dynamics for palm oil. The one of the largest producers of palm oil, Indonesia, increased its reference price for crude palm oil (CPO) to around USD 1,072 per metric tonne, up from USD 962 in November. This shift caused a rise in the export tax from USD 124 per tonne to USD 178 per tonne. The hike in Indonesia’s export tax made its palm oil more expensive on the international market, which led buyers turn to Malaysia as an alternative. This increase in demand for Malaysian palm oil supported higher palm oil prices and, consequently, Fatty Alcohol prices as well.

In Germany, Fatty Alcohol C12-C14 FOB Hamburg prices rose by 1.1% in the week ending December 6th, a relatively smaller increase as compared to the 2.3% rise observed in the preceding week.

Looking ahead, Fatty Alcohol prices are expected to rise further as we approach the end of the year. With limited supply and ongoing shifts in market dynamics, Fatty Alcohol prices are likely to experience sustained upward pressure through December and into early 2025.