Palm oil leads historic vegoil rally as demand outpaces supply

Although palm oil production is predicted to rebound in 2022, prices are expected to remain elevated as output gains could struggle to keep pace with continued demand increases for vegoils in general, especially as pandemic restrictions ease. Benchmark Malaysian palm oil futures hit lifetime highs on Monday, closing 60% higher than at the end of January 2021 and more than double the end-January 2020 price. Last month’s gains alone totaled 19%.

FORT COLLINS, Colorado: Global vegetable oil supplies have tightened in the last couple of years even as the pandemic slowed the demand growth rate, and that has had the most profound price impact on palm oil, the most widely used vegetable oil.

Although palm oil production is predicted to rebound in 2022, prices are expected to remain elevated as output gains could struggle to keep pace with continued demand increases for vegoils in general, especially as pandemic restrictions ease.