InfoSAWIT, JAKARTA – Director of Godrej International, Dorab Mistry, has projected that global demand for vegetable oil will continue to grow steadily by approximately 3 million metric tons per year. In 2023-2024, demand rose by 3 million metric tons, and in 2024-2025, it is expected to increase by another 2.5 million tons. This growth is seen as a primary driver of the anticipated price surge in palm oil and other vegetable oils in the global market.

According to Mistry, several external factors also play a role in the future price outlook for palm oil, including deficits in vegetable oil supply, new biofuel mandates, government incentives, weather patterns in South America, fluctuations in the US dollar, crude oil prices, and unpredictable climate changes. "There is a possibility that India might reduce import duties again, which could trigger significant price shifts," Mistry remarked during his presentation at the palm oil conference, as reported by InfoSAWIT on Monday (11/11/2024).

Mistry forecasts that palm oil prices on the Bursa Malaysia (BMD) for third-month contracts will range around 5,000 ringgit from now until June 2025. Demand from China and the Ramadan season from January to March is expected to fuel strong market sentiment.

Extreme weather events in South America or other regions could further drive prices upward, potentially leading to temporary biofuel mandate suspensions in certain countries.

In addition, soybean oil prices on the Chicago Board of Trade (CBOT) are anticipated to benefit from strong biodiesel demand in the United States, particularly with adjustments in incentives that shift credits from processors to producers.

Should there be new announcements regarding Sustainable Aviation Fuel (SAF), this would also serve as a positive factor for vegetable oil prices. In 2025, sunflower oil supplies are expected to remain balanced, which means they are unlikely to exert downward pressure on palm oil prices globally. (T2)