# Fatty acids and Palm oil

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

Source page: https://www.materialinsights.org/links/fatty-acids-and-palm-oil/

[Fatty acids](https://www.materialinsights.org/chemicals/fatty_acids/) (chemical) and [Palm oil](https://www.materialinsights.org/commodities/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.