InfoSAWIT, KARACHI - At the 7th Pakistan Edible Oils Conference (PEOC) held on January 10-11 in Karachi, global market analysts projected that the demand for vegetable oils will continue to increase. The role of palm oil, which has previously served as a balancing supply, is now under scrutiny as its prices soar, surpassing those of soybean oil.
Thomas Mielke, Editor and CEO of Oil World, revealed that global consumption of oils and fats has nearly tripled over the past 30 years. In the 1994/1995 period, consumption was recorded at 92.6 million tons, and it is expected to reach 264.2 million tons by 2024/2025. Palm oil, which initially accounted for 15% of total global oil and fat consumption, now represents over 30%.
However, the growth of the palm oil industry faces significant challenges. Mielke highlighted the potential imbalance between meeting food demand and the development of biodiesel and Hydrotreated Vegetable Oils (HVO). "If land productivity is not improved or land expansion is not undertaken, global demand for palm oil in the food sector could be disrupted," he stated in information obtained by InfoSAWIT on Sunday (February 2, 2025).
Julian Conway McGill, Managing Director of Glenauk Economics, also addressed the dynamics of the palm oil market in his presentation titled “Is Palm Oil A Poor Man’s Oil or A Premium Oil?”. He discussed how the surge in palm oil prices could diminish its competitiveness compared to other vegetable oils. "Palm oil exports peaked in 2019 and have not returned to that level. On the other hand, soybean exports in seed form are now a primary source of growth," McGill noted. He added that replanting programs are more efficient than opening new land to maintain the sustainability of the palm oil industry.
Dorab Mistry, Director of Godrej International, echoed similar sentiments. He assessed that palm oil prices exceeding those of soybeans make it more competitive in the premium category. Nevertheless, Mistry emphasized that Indonesia's role remains crucial in maintaining global palm oil market stability. President Prabowo's statement reaffirming Indonesia's commitment to sustainable palm oil expansion was seen as a positive signal for the international market.
The expansion of palm oil in Indonesia is viewed as a strategic move to meet long-term demand from non-European Union consumer countries. With the continuous rise in demand for oils and fats, decisions regarding productivity and land expansion will determine the future of the global palm oil industry. (T2)
