Bouncing Back

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According to a report published by Global Industry Analysts Inc., vegetable oil and edible oilseed prices appreciated by about 15 percent in 2009, which is attributed primarily to increased demand for palm oil and other factors such as increasing investments in biodiesel plants and growing demand for palm-oil derived biodiesel.

Aside from the economic downturn in 2008 onward, GIA found that there has been a significant rise in terms of value and volume in the world market for vegetable oils in the past decade, with Asia currently dominating the market from both production and consumption standpoints.

While North America and the European Union dominated the world in production of vegetable oils in the early 1990s, the report shows that lead has been dwindling since 2004 due to production in China, Brazil, Argentina, Malaysia and Indonesia. In fact, the report shows that the North American and the European Union share of world vegetable oil production dropped from 35 percent to 20 percent over this time period.

Malaysia and Indonesia are currently the world's largest producers of palm oil, while the U.S., Brazil, Argentina and China are currently the world's primary producers of soy oil. The report also shows that palm oil now represents both the largest and the fastest growing segment of the world vegetable oil market. Growing demand from emerging countries, such as China, India and Indonesia is expected to sustain a strong, robust market for vegetable oils.