Palm oil industry wary of uncertain futures

Malaysian palm oil futures hit an eight year high last week, as rampant demand by food and biofuels continues to deplete global stocks.

The value of the market rose by 4 per cent between Monday and Thursday peaking 2,205 ringgit (€473) a tonne – a level unseen since December 1998.

The rise means further cost hikes for the food industry, which is becoming increasingly reliant on palm oils as an alternative to oils high in unhealthy trans fats.
The rise in supply and price follows a steady increase in demands for the product throughout last year.

Global palm oil consumption in 2006 increased by 6.6 per cent to 35.3m tonnes, according to figures from the US Department of Agriculture (USDA). This trend is expected to continue in 2007, with an estimated 5.5 per cent consumption rise, the USDA forecasts.

This increase in consumption is being driven in part by biofuel demand, and in the food sectory, by growing consumer health awareness.

AP-Foodtechnology