Price Shifts and Policy Measures Shaping the Market

The global oleochemicals market is moving through a complex phase, largely influenced by an oversupply of palm oil. Prices have reflected this turbulence, dropping from RM 5,150 per ton to RM 4,200, before recovering to about RM 4,700. Such swings underline how sensitive the sector is to supply imbalances and policy changes, particularly in regions heavily reliant on palm oil as a feedstock. For producers, this volatility adds pressure to margins, while downstream industries benefit from more competitive costs.

It is in moments of such uncertainty that companies rely on stable partners with wide sourcing capabilities. As one industry executive put it, “Access to reliable supply is not just about managing costs—it’s about ensuring business continuity in volatile times.” Tradeasia International, with its integrated palm and oleochemical distribution network, continues to play a pivotal role in bridging global markets and ensuring access to both raw materials and value-added solutions. This positioning enables downstream industries to adapt quickly and maintain resilience.

Indonesia’s B40 biodiesel mandate, requiring 40% palm-based biodiesel blending, is another major force shaping the market. This policy diverts large volumes of palm oil into the energy sector, easing oversupply concerns while supporting prices. At the same time, it aligns with sustainability goals by reducing dependence on fossil fuels. However, this also affects feedstock availability for oleochemicals, leading to strategic realignments in production volumes and investments in integrated facilities that link biodiesel and oleochemicals to maximize efficiency.

Regional Dynamics and Sustainability Commitments Driving Growth

Asia-Pacific continues to dominate the global oleochemicals landscape, accounting for nearly 47.6% of market share. The region’s market, valued at around USD 10.1 billion in 2023, is projected to expand at a CAGR of 8.1% through 2030, led by countries such as China, India, Malaysia, and Indonesia. Europe, on the other hand, represents a key consumption hub, with its market expected to grow from USD 11.46 billion in 2024 to nearly USD 20 billion by 2034, driven by stringent regulatory frameworks and increasing demand for sustainable alternatives.

Sustainability commitments are becoming a non-negotiable factor for global buyers. Certification schemes such as RSPO and other voluntary standards already cover 17–20% of global palm oil production, a significant step in reducing deforestation risks and strengthening transparency. In addition, waste-based feedstocks, such as used cooking oil, are being increasingly integrated into supply chains to meet the demands of Europe and North America, where bio-based and traceable products are prioritized.

In conclusion, the oleochemicals industry is at a turning point where oversupply, policy measures, and sustainability are tightly interconnected. Companies that can balance these dynamics, while maintaining reliable sourcing and transparent practices, will secure long-term competitiveness. With Tradeasia International strategically positioned at this intersection, businesses worldwide can better navigate volatility while capitalizing on the rising demand for sustainable oleochemicals.

 

Sources:

  1. Oleochemicals Asia - Market Analytics and Industry Insights - https://www.oleochemicalsasia.com/market-analytics

  2. International Institute for Sustainable Development (IISD) - Global Market Report: Palm Oil Prices and Sustainability -https://www.iisd.org/publications/report/2023-global-market-report-palm-oil

  3. Mordor Intelligence - Asia Pacific Oleochemicals Market Trends - https://www.mordorintelligence.com/industry-reports/oleochemicals-market