Fatty acids and Palm oil

Palm oil is a raw material for fatty acids; their prices have moved together.

Fatty acids (chemical) and Palm oil (commodity): 2 relationships.

How they are linked

1. Feedstock

Physical flow · Direct · Palm oil → Fatty acids

Fatty acids is made from palm oil: it is one of the raw materials its production routes start from.

2. Price link: feedstock cost

Cost and price · Moderate · Both ways

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.

• 0.01 monthly change correlation
• 0.34 12-month change correlation
• 0.78 fitted elasticity

Built from the site data on production routes, energy flows, industry value chains, input-output tables and prices.