Coconut vs. Palm Kernel Oil: Decoding Q3 2025's High-Stakes Sourcing Game

In the fast-moving oleochemicals sector, the third quarter of 2025 has presented a complex puzzle for manufacturers of Caprylic Triglyceride. The once-predictable cost relationship between its two primary feedstocks—coconut oil (CNO) and palm kernel oil (PKO)—has been fundamentally upended, forcing a strategic rethink on procurement to protect margins. Navigating this complex landscape requires a partner with deep market intelligence, a role Tradeasia International has perfected in the global palm and oleochemical trade.

The Unrelenting Climb of Palm Kernel Oil

The most significant factor reshaping the market is the relentless price surge of PKO. As of September 2025, RBD Palm Kernel Oil is commanding a price of $2,035 per metric ton (FOB Malaysia). This isn't a minor fluctuation; it represents a massive 53.62% increase from the previous year, driven by tight global supply lines and unwavering demand. This sustained bullish trend has caught many by surprise, turning what was once a dependable, cost-effective option into a premium raw material. As one leading trader noted, "We're seeing clients re-evaluate their entire formulation cost structure. The key is agility and access to real-time supply data, which dictates profitability now more than ever."

Rethinking the Coconut Oil Equation

While PKO prices have soared, the story for coconut oil is one of market correction. After a period of extreme highs, CNO prices have settled to around $2,600 per tonne (CIF Rotterdam). Though still the more expensive option, the critical price spread between the two oils has compressed dramatically. The gap, which stood at over $700 per metric ton earlier this year, has now shrunk to less than $600. This seemingly small change has huge implications, forcing producers to question long-held assumptions. The decision is no longer a simple matter of cost; it’s a nuanced choice between a narrowing price advantage and the unique performance characteristics each oil brings to the final product.

Sources:

1. Surge in RBD Palm Kernel Oil Prices: Navigating Market Dynamics in September 2025 - https://www.oleochemicalsasia.com/reports/rbd-pko-prices-september-2025

2. LIPSA Market Report SEPTEMBER 2025 - https://www.lipsa.com/en/market-report

3. Coconut Oil Prices, News, Monitor, Index, Analysis, Demand - https://www.chemanalyst.com/industry-report/coconut-oil-market