Fatty acids: Correlation
Prices it moves with, and why
Fatty acids are priced off the oils and fats they are split from, mainly palm, palm kernel and coconut oil, plus tallow and tall oil, with energy for the high-pressure splitting and demand from soaps, surfactants and tyres.
Price index US PPI: fatty acids index (BLS base period =100) · monthly, Jan 2006 to Sep 2026What its price moves with
Selected linkFatty acids and Palm oil
Monthly changes 0.01 little or none correlation 12-month changes 0.34 weak correlation Last 5 years 0.03 monthly changes Lead or lag +5 mo Palm oil tends to lead by 5 months (r 0.21) Price function, Jan 2006 to Sep 2026 Fatty acids ≈ 1.15 × (Palm oil)0.78 R² 0.41 On this fit, a 10% higher palm oil price goes with a 7.7% higher fatty acids price over the long run. Units: index (BLS base period =100) and $/mt.Chart: Fatty acids and Palm oil prices rebased to 100 at Jan 2006, log scale
Both prices rebased to 100 at Jan 2006, on a log scale so equal percentage moves look the same size.Chart: Fatty acids price against Palm oil price, monthly, log scales, with fitted line
Each dot is one month; paler dots are older (2006), darker dots recent (2026); the ringed dot is the latest month. The dashed line is the fitted price function. Both axes are logarithmic.Palm and palm kernel oil are the main raw material, so their cost sets most of the fatty acid price. The US index tracks it loosely: monthly moves correlate at only 0.01 but yearly moves at 0.34, because US makers use more tallow and price on contracts.
little or none co-movement month to month · 248 months Show chartsCoconut oil supplies the lauric (C12) cuts used in soaps and cosmetics, so a poor copra harvest raises those grades. The link shows weakly in the US index, with yearly moves correlating at 0.28, since the index blends many cuts and feedstocks.
little or none co-movement month to month · 248 months Show chartsSplitting oil with water yields fatty acids and glycerine together, so the value of the glycerine stream offsets part of the oil cost. When glycerine is cheap, splitters need a higher fatty acid price to cover their feedstock.
Not enough overlapping price history to measure.Fatty acids are a building block for soaps and many surfactants, and both are priced off the same oils and the same household demand. The US indices move together: monthly changes correlate at 0.30 and yearly changes at 0.65.
weak co-movement month to month · 248 months Show chartsCaustic soda turns fatty acids into soap, so both are used in the same plants and follow the same US chemical cycle. The indices share this common driver more than a direct cost link: monthly moves correlate at 0.34 and yearly moves at 0.60.
weak co-movement month to month · 248 months Show chartsFat splitting runs at high temperature and pressure and distillation needs steam, so fuel is the main cost after oil. The European gas price shows the link over a year, with 12-month changes correlating at 0.63, though monthly moves correlate at only 0.18.
little or none co-movement month to month · 248 months Show chartsHow to read these numbers
Correlation of monthly changes (the number in the coloured pill) compares how much each price moved, month by month, since 2006 or the first month both series exist. It runs from −1 to +1: near +1 the two usually rise and fall in the same months, near 0 there is no link, and a negative number means they tend to move in opposite directions. Above 0.7 is strong, 0.4 to 0.7 moderate, 0.2 to 0.4 weak.
12-month changes compare year-on-year moves, which shows whether two prices share the same cycles even when the month-to-month noise differs.
Price function is a straight-line fit of the two prices on logarithmic scales: price ≈ k × (partner price)β. β is how much this price moves, in per cent, for a 1% move in the partner over the whole period, and R² is the share of the variation the fit explains. Two prices that both drift up with inflation can fit well without any real link, so read it together with the monthly correlation.
Lead or lag checks whether the monthly correlation is clearly higher when one price is shifted by 1 to 6 months.
Correlation is not cause. The reasons on each card explain the economic link; the numbers show how strongly it has shown up in prices. Proxy series are US producer price indexes or related prices and can blur the real link.
Data: World Bank Commodity Price Data (Pink Sheet), October 2026; US Bureau of Labor Statistics producer price indexes, IMF primary commodity prices and US EIA prices via FRED, Federal Reserve Bank of St. Louis, retrieved November 2026. Calculations by this site.