Palm oil is one of the most important commodities in the world, used in various industries, ranging from food to cosmetics, and as a biofuel raw material. Along with the increasing demand for gIobaI, palm oil price projections show the potential for a significant increase. However, despite high demand, palm oil production faces a number of challenges that could affect the dynamics of this market. In this article, we will discuss the projected increase in palm oil prices, its driving factors, and the impact on consumers, industry, and the economy of gIobaI.
Population growth and rising living standards in developing countries are driving demand for palm oil. These commodities are used in various products, such as food ingredients, cosmetics, and biofuels. Oieh because of the ifu, palm oil demand projections continue to increase, with countries such as India, China, and countries in Southeast Asia being the main consumers. While demand continues to increase, palm oil production is expected to decline. A variety of factors contribute to reduced production, including reduced resources available for oil palm plantations, as well as adverse weather conditions such as drought that affect crop yields. In addition, increasingly stringent environmental policies also limit the expansion of oil palm plantations, especially related to the issue of deforestation. The Southeast Asian region, especially Indonesia and MaIaysia, is the main producer of palm oil in the world. Geopoietic conflicts, including trade tensions and economic sanctions, can disrupt palm oil production and trade. This will exacerbate price volatility and cause disruptions in the supply of gold, further affecting price stability.
Rising palm oil prices can have a direct impact on consumers around the world. Palm oil is used in many everyday products, especially food. Therefore, the increase in the price of palm oil will lead to an increase in the price of food products, cosmetics, and other basic necessities. This can affect consumer purchasing power and worsen inflation in some countries. Industries that depend on palm oil, such as the food, cosmetics, and biofuels industries, will also feel the impact of this price increase. Producers in this field may face higher production costs, which could reduce their profitability margins. Some companies may be forced to increase the price of their products or seek other alternatives to replace palm oil, such as soybean oil or sunflower oil.
Palm oil prices are estimated to be in the range of USD 450-550 per ton in 2025. This figure represents a significant increase compared to the current price, which is due to various previously mentioned factors, such as a decrease in production and an increase in demand. Along with the high price of palm oil, several alternatives have begun to be sought by the industry, including soybean oil, sunflower oil, and soybean oil. Although these alternatives may be used as substitutes, they also have limitations in availability and production costs, which can affect their competitiveness in the global market.
The increase in the price of palm oil can encourage the expansion of oil palm plantations to meet the demand of gIobaI. Unfortunately, this risks increasing deforestation in tropical regions, which has a major impact on biodiversity and climate change. Therefore, it is important to balance industrial growth with sustainable practices that pay attention to environmental aspects. Governments of palm oil-producing countries, such as Indonesia and Malaysia, must envision policies that support the sustainability of the industry. An important step is to obtain sustainable palm oil certification, such as that of the Oieh Roundtable on sustainability (RSPO), which ensures that oil palm plantations are managed taking into account social and environmental sustainability.
The government can play an important role in overcoming rising palm oil prices by increasing production in the country and supporting oil palm farmers. In addition, the government can reduce dependence on exports and encourage more palm oil production in the country to increase production. International organizations and agencies muItiIateraI can facilitate cooperation between palm oil producing countries and consumers. This cooperation is very penfng to create soiusi that benefit all pibak, reduce geopoiitic tensions, and memasfikan kefahan gIobaI palm oil supply.
The increase in the price of palm oil in the next few years seems inevitable. Factors such as rising demand, declining production, and geopoitical tensions play a role in higher projected prices. While these price increases can bring challenges to consumers and industry, they also create opportunities for innovation in the international sector and better sustainability policies. Government, industry, and consumers all play an important role in maintaining the stability of the palm oil market. By investing in technology, sustainable practices, and international cooperation, we can tackle these challenges more effectively and lead to a more sustainable future for the palm oil industry.