InfoSAWIT, JAKARTA - The global vegetable oil industry is facing significant challenges as the competitive landscape shifts and political policies impact trade.

Dorab E Mistry, a palm oil analyst from Godrej International Limited, outlined various challenges and opportunities within the palm oil and global vegetable oil sectors over the past year. He noted that palm oil has lost market share significantly due to the rising dominance of soybean and sunflower oils. Additionally, political factors, such as the presidential elections in Indonesia and the United States, have also influenced the dynamics of vegetable oil trade.

Currently, palm oil supply has been relatively sufficient since April, but high prices are hindering demand expansion. Indonesia's B40 program has commenced, while the policy to eliminate non-PSO biodiesel subsidies is seen as a bold move. Mistry also observed that President Trump is now more cautious in implementing trade tariffs, although he continues to seek quick profits that could negatively impact American farmers and the biodiesel industry.

Mistry predicts that palm oil production this year will surpass that of 2024, with Indonesia's output expected to increase by 2 million metric tons. Furthermore, Indonesia has eliminated fraudulent practices related to used cooking oil (UCO), leading to a more stable global supply. However, market competition remains fierce as palm oil fights to reclaim lost market share. Palm oil stocks and supplies are expected to remain tight until the end of March 2025.

Meanwhile, vegetable oil prices from December to March have remained relatively stable due to initial implementation challenges of B40 in Indonesia and the outcomes of the U.S. elections. However, the shadow of Trump's policies is predicted to have a long-term impact on the global vegetable oil sector. (T2)

For more detailed insights, refer to the January 2025 edition of InfoSAWIT.