Palm oil prices seen supported by emerging economies and biodiesel demand

In California, factors such as improving economic conditions, rising living standards and changing eating habits in emerging countries, and growing demand for vegetable oil as a feedstock for biodiesel production, are encouraging a robust outlook for palm oil. Other factors driving market growth include the US ban on trans-fat foods that is resulting in rapid shift in consumption from soybean oil to palm oil, and European Union’s strict regulations against genetically modified (GM) food products. The low price of palm oil compared to other vegetable oils such as rapeseed and soy oil and shift from soybean to palm in acreage for bioethanol production also augurs well for the market.