Palm oil: changes in the market and its impact

Palm oil, long known for its availability and low price, is now experiencing changes in the world market. According to Bloomberg, this vegetable oil has lost its position as the cheapest among edible oils, ceding this title to soybean oil.

Back in November 2022, palm oil cost $782 less per ton than soybean oil. Its high popularity was due to the lower consumption of land for cultivation compared to other crops, such as soy, sunflower or rapeseed.

However, today the situation has changed. Palm plantations in Indonesia and Malaysia, which provide 85% of the world's supply, are facing difficulties. New palm trees can take four to five years to grow, while soybeans can mature in six months, affecting overall production costs.

Palm oil prices are up 10% this year, while soybean oil is down 9%, according to Bloomberg. This caused interest in the search for alternative products among producers and consumers.

Major consumers of palm oil, such as confectionery companies and biodiesel producers, remain loyal to their suppliers. The use of palm oil is widespread in pizzerias, ice cream shops, as well as in the cosmetic and food industries.

The future of the palm oil market remains uncertain. Bloomberg's remarks highlight that seasonal factors can affect supply and demand. For example, consumption of palm oil typically declines in December and January in India due to its hardness at low temperatures, prompting the search for alternative solutions.

In conclusion, the palm oil market continues to evolve under the influence of global factors. Although it is losing its economic benefit, its popularity and application remain significant in various fields of industry and production.