Palm oil prices have skyrocketed to multi-year highs as production falls and demand for biodiesel grows. Industry reports show that palm oil output in key producing countries like Indonesia and Malaysia has declined due to unfavorable weather conditions and labor shortages.
At the same time, global demand for biodiesel, which uses palm oil as a key feedstock, has surged as countries ramp up efforts to reduce carbon emissions. “The combination of lower supply and higher demand is driving prices up,” said a commodities analyst.
The price of palm oil has risen by 25% year-to-date, reaching $1,200 per metric ton. This marks the end of an era of cheap palm oil, which has been a staple in food products and biofuels for decades.
Analysts warn that the price surge could have far-reaching implications, including higher costs for food manufacturers and increased inflation in emerging markets. Consumers may also face higher prices for everyday products like cooking oil and packaged foods.
