The global vegetable oil markets have been full of curveballs lately, which was shown again late last week. Increasing commodity and food prices is inevitable with the shortage of oils around the world, but governments’ response has enabled prices to rise even further. Last Friday, Indonesia announced new export bans for palm products, upsetting the global market for palm and other vegetable oils once again. Although the export ban does not seem to account for crude palm oil, which many feared it would, prices for crude palm oil did jump early Monday.
It certainly added to the feeling of insecurity that most players within the global market for vegetable oils are experiencing. As price direction is very difficult to predict since it has not been determined mostly by supply and demand for months now. Looking at the supply and demand, we are looking at continuously tight markets as production keeps seeing issues. But as sentiment and policy changes play a very important role, it seems like we will just have to see what’s in store for us.
