Market – Palm oil at a glance

Market

Palm oil is the edible vegetable oil that is the most produced and consumed worldwide.

PRODUCTION

World palm oil production is dominated by Indonesia and Malaysia. However, production in Latin and Central America, and to a lesser degree in Africa, has been increasing, especially these past 10 years. Eventhough the rate of production growth has slowed compared to previous decades, it has increased by 43% between 2010/11 and 2017/18.

Some countries set up programs to develop palm oil plantations. For example, Ivory Coast launched it’s 3rd Palm Oil Plan for the period 2015-2025 with the objective of planting or replanting 200 000 hectares. Several African countries also attracted foreign investors. The case of Gabon with the Singapour group Olam is emblematic : palm oil production has almost doubled in two years.

CONSUMPTION

Population growth, higher living standards, urbanisation are factors that lead to higher consumption of vegetable oil. Palm oil is the big beneficiary as it has a price advantage, followed by soy oil.

Emerging countries pull world consumption. In developed countries, it should be stable but campaigns against palm oil could affect negatively demand. On the other hand, the progressive ban on partially hydrogenated vegetable oils, a source of trans fatty acids, in the agri-food industry could provide support.

Many manufacturers, but also traders, have set themselves the goal of sourcing sustainable palm oil (RSPO) in the short term. Today, 19% of the palm oil produced is RSPO certified.

Anne Guillaume-Gentil