Limited lauric oils supplies should maintain upward pressure on mid-cut fatty alcohol values into 2026.
Lauric oils are a key feedstock used in the production of oleochemicals such as fatty alcoholsand are primarily sourced from coconut oil (CNO) and palm kernel oil (PKO). Fatty alcohols are used in a variety of products including personal care, cosmetics, as well as in industrial applications.
The fourth quarter of 2025 has been plagued with limited demand and uncertainty over the EU Deforestation Regulation (EUDR) implementation date, pushing lauric oils and mid-cut alcohols prices down.Mid-cut fatty alcohols prices hit a high of $3,100/t fob southeast Asia in early August, but prices have since declined to a low of $2,400/t in mid-December, according to latest Argus data.
Tighter supply could lend support to CNO and PKO values in 2026, which could help to push mid-cut fatty alcohols prices up as costs are passed down.CNO supply has been flat for years, and new coconut tree planting in Asia will take a number of years to boost yields. PKOsupplies will likely remain tight in Malaysia, even though palm oil output has risen in the country.
The Malaysian Palm Oil Board (MPOB) expects palm oil production at around 19.5mn t this year, potentially hitting a record 20mn t. But PKO is a popular cocoa butter substitute and continues to command strong demand from the confectionary industry. In Indonesia, the world's largest palm producer, supplies of PKO could be curbed next year, following severe floods this and the government's palm plantation land seizure.
Additional fatty alcohols capacity has come on stream in southeast Asia during the second half of 2025, and this additional demand is likely to pull on lauric oil supplies next year.
Demand uncertainty
On the demand side, European consumption has fallen significantly this year owing to the ongoing uncertainty surrounding the implementation of the EUDR, according to market participants. The regulation, originally slated to come into effect at the end of 2024, was pushed back to the end of 2025. But on 17 December, the European Parliament backed an additional one-year delay.
This opens up the European market to more palm oil and PKO than would have been the case had the EUDR come into effect. This will likely put further upward pressure on mid-cut alcohols prices in 2026 as demand picks up from Europe.
The EUDR delay postpones application of due diligence requirements by one year for large and medium operators from 30 December 2026. Small operators have until 30 June 2027.
By Neha Popat
