InfoSAWIT, JAKARTA – Palm oil is one significant commodity in the globe and delivers impacts for the economy in the world. The price just like other commodity, has something to do with many factors. In this article, we would explore the factors that could encourage palm oil price.
Director of Godrej International limited, Dorab Mistry said that extreme weather changes, such as, El Nino, smoke in palm oil plantations would have something to do with the production and supply; the two would make palm oil more expensive for being in limited supply.
The bad weather in South America namely where soybean grows could have something to do with other vegetable oils. It would escalate palm oil demand as the alternative that could make it more expensive.
Besides, Dorab continued, the policy in Brazil that supports to use vegetable oil could also escalate palm oil demands in the country and positively have something to do with the price.
“The production of new biodiesel, such as, renewable diesel could make new market for palm oil that also increase its demands and price,” he said, as InfoSAWIT quoted from his presentation in an international – scale seminar recently.
Including the capacity of sustainable aviation fuel (SAF) that could deliver chances for palm oil use in aviation industries to escalate the demands.
Besides 2024 increasing factors, some others could limit its price, such as, economic recession in the United States of America. This could reduce palm oil consumption because many consumers and industries would save the spent and this would make palm oil cheaper.
Higher interest rates in a longer period would also minimize investment and delay economic progress that potentially would reduce palm oil demands.
The good weather in South America and Africa could deliver good harvest and would press palm oil price. There is nothing to do about weather and would be not positive for palm oil price.
“The competition among vegetable oils, such as, sunflower could minimize palm oil demands. Uncertainty in biofuel policy or the lack of policy publication would have something to do with palm oil price,” Dorab said. (T2)