Palm oil: Trading
Ringgit futures in Kuala Lumpur set the world price
What this tab covers How and where it is bought and sold: who buys and sells, exchanges and benchmarks, contract types, the big trading houses and how prices are discovered.The benchmark is the crude palm oil futures contract on Bursa Malaysia, priced in ringgit. China's Dalian Commodity Exchange trades palm olein futures, and spreads between the two link the markets. Physical cargoes trade through a few large integrated groups such as Wilmar and Olam, which own plantations and processing (Pirrong, pdf pp. 46-47). Palm competes with soybean, rapeseed and sunflower oil, so traders watch those spreads constantly (Geman, pdf p. 160).
Where it is bought (buyers)
- Indian refiners and traders (AWL Agri Business, Patanjali Foods, Emami Agrotech, Gokul and others) buy CPO and RBD olein cargoes from Indonesia and Malaysia, CIF Indian west and east coast ports
- Chinese, Pakistani, Bangladeshi, East African (Kenya) and EU buyers purchase refined olein and stearin
- Oleochemical makers buy palm kernel oil and stearin
Where it is sold (sellers)
- Indonesian and Malaysian plantation groups (Wilmar, GAR, SD Guthrie, Musim Mas, Apical, IOI, KLK) sell from Dumai, Belawan, Port Klang, Pasir Gudang and other ports
- Thailand, Colombia, Guatemala and Papua New Guinea are smaller exporters
Exchanges and benchmarks
| Venue | Contract | Notes |
|---|---|---|
| Bursa Malaysia Derivatives | Crude Palm Oil futures (FCPO), 25 t, ringgit per tonne | global benchmark; third-month contract is the reference |
| Dalian Commodity Exchange | RBD palm olein futures, yuan per tonne | large speculative volume; tracks Chinese demand |
| MCX and NCDEX (India) | Crude palm oil futures | suspended by SEBI since 20 December 2021; the ban on seven agri contracts (incl. soybean and derivatives, crude palm oil, mustard) was extended to 31 March 2027 (The Week/PTI, 27 March 2026); Indian buyers hedge on Bursa and Dalian |
| CBOT (CME Group) | Soybean oil futures | used to price and hedge the palm-soy spread |
Contract types
- FOB Indonesia or Malaysia cargoes, flat price or priced off FCPO
- CIF India cargoes for prompt and forward shipment months
- PORAM and FOSFA standard contracts govern quality and disputes
- Domestic Indonesian tenders (KPBN) for CPO
Top trading houses
- Wilmar
- Musim Mas
- Apical (RGE)
- Golden Agri-Resources
- Cargill
- Olam (ofi)
- Louis Dreyfus Company
How prices are discovered
- Bursa Malaysia FCPO settlement prices
- MPOB daily reference prices
- Physical assessments by S&P Global Commodity Insights, Argus and Fastmarkets
- KPBN tender prices in Indonesia; Indonesian export reference price for levy