Palm Oil (CPO)
Crude Palm Oil is the world's most produced and traded vegetable oil, extracted from the fruit of oil palm trees. Indonesia and Malaysia together account for over 85% of global production. CPO is used in food manufacturing, oleochemicals, and biodiesel. Bursa Malaysia Derivatives is the key pricing benchmark.
- CPO (FFA 5% max)
- CPO (FFA 3% max)
- Standard Quality
- FOB
- CIF
- CFR
Palm Oil (CPO), in brief.
- Common origins
- Indonesia
- Malaysia
- Thailand
- Colombia
- Nigeria
- Common destinations
- India
- China
- European Union
- Pakistan
- Bangladesh
- Grades and specifications
- CPO (FFA 5% max)
- CPO (FFA 3% max)
- Standard Quality
- Incoterms
- FOB
- CIF
- CFR
- Unit of measure
- Metric Tons
What moves Palm Oil (CPO) pricing
Crude palm oil (CPO) trades on Bursa Malaysia Derivatives (FCPO contract): the dominant global benchmark. Indonesia (~60% of supply) and Malaysia (~25%) dominate. Indonesian DMO (Domestic Market Obligation) and export levy structures cause supply shocks; the 2022 Indonesia palm export ban spiked global oil prices. The palm-soy oil spread (BMD palm minus CBOT soy oil) signals biofuel-versus-food economics. Indonesia's biodiesel mandate (B40 and rising) absorbs increasing share of domestic production.
How Palm Oil (CPO) cargoes are priced and settled
Standard cargo: 1,000-25,000 tonnes per parcel for bulk; flexitank or drum trade for smaller buyers. Pricing is FCPO Bursa plus or minus differential. PORAM (Palm Oil Refiners Association of Malaysia) contracts dominate the Malaysian-origin trade; ITS or MPOB inspection at load is standard.
Palm Oil (CPO) specifications and dispute practice
CPO specs: free fatty acid (FFA, max 5% for export-grade), moisture and impurities (M&I, max 0.25%), DOBI (Deterioration of Bleachability Index, min 2.3 for refining-grade). Refined grades: RBD (refined, bleached, deodorized) palm oil, RBD palm olein, RBD palm stearin. Disputes commonly involve FFA spike in transit and DOBI degradation.
Where Palm Oil (CPO) comes from and where it goes
Top exporters: Indonesia, Malaysia. Top importers: India (largest palm oil importer globally), China, Pakistan, Bangladesh, EU (declining due to deforestation regulations), Egypt, Türkiye. EUDR is materially reshaping Malaysian and Indonesian flows toward non-EU buyers in 2024-2026.
Who trades Palm Oil (CPO)?
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