Producing Palm Kernel Diethanolamide places manufacturers in a unique strategic bind: they are critically dependent on two entirely different raw materials. The 2040 outlook requires a sophisticated strategy that acknowledges the vastly different risk profiles of these two feedstocks: Palm Kernel Oil (an agro-commodity) and Diethanolamine (a petrochemical).

This unique dependency places buyers and manufacturers in a precarious position. A "one-size-fits-all" sourcing strategy for these feedstocks is destined to fail. To thrive, companies must engage with partners who possess the agility and specialized expertise to navigate these two vastly different commodity worlds—managing Palm Kernel Oil derivatives one day and petrochemicals like Diethanolamine the next.

The "Agro" Risk: Weather, Labor, and Palm Kernel Oil Yields

The agro-commodity risk, tied directly to Palm Kernel Oil, is driven by unpredictable forces of nature and labor. The 2020-2022 La Niña weather pattern, for example, was a direct contributor to reduced palm fruit yields, causing supply tightness that impacted Palm Kernel Oil availability across the globe. Concurrently, post-pandemic labor shortages in Malaysia, a top producer, were estimated to have cut CPO production by ~1.5 million tons in a single year, which in turn severely reduced the available Palm Kernel Oil crush.

While managing agricultural risk is complex, the petrochemical side is no simpler. This dual-risk environment highlights a new reality for the chemical industry: "The future of distribution," as one thought leader put it, "is not about holding inventory. It's about mastering information, managing global risk, and delivering a raw material so reliable it becomes invisible to the customer's operation."

The "Petro" Risk: Energy, Infrastructure, and Diethanolamine Supply

The petrochemical risk is tied to the second raw material, Diethanolamine, and is driven by energy prices and infrastructure integrity. Roughly 70% of Diethanolamine is derived from Ethylene Oxide. The 2021 Texas winter storm, which forced shutdowns of petrochemical plants, caused Ethylene Oxide and Diethanolamine prices to spike by 25-30% in a single quarter due to force majeure declarations. This risk is geopolitical and operational, entirely separate from the agricultural risk of Palm Kernel Oil. Comparing their volatility from 2020-2024, Palm Kernel Oil prices were approximately 1.5 times more volatile than the Brent crude oil benchmark, proving that a single hedging strategy for both raw materials is ineffective.

Sources:

  1. Palm-Based Oleochemicals Product Brochure 2025: Esters & Fatty Acids

  2. Commodities Analysis: Southeast Asian palm export levies and the impact on global oleochemical supply

  3. Global Specialty Oleochemicals Market Analysis: Trends, Competitive Landscape & Forecast to 2030