Commodity prices have risen significantly so far this year, with palm oil futures traded in Malaysia rising 4% on Wednesday (12) to a record high of MYR4,524 (about HK$8,536) per tonne, inevitably raising the cost of everything from restaurants to confectionery to cosmetics manufacturers, and driving a shift in consumption patterns.
Foreign media pointed out that tropical oil exists in a variety of products such as chocolates, pastries, soaps, cosmetics such as lip balm, and biofuels, and is widely used in restaurants in Asia. With weather concerns and soaring crop prices in China, this tropical oil has been in the spotlight during a global commodity upturn.
Palm oil is produced primarily in Indonesia and Malaysia, making it very popular. Studies estimate that about half of all packaged products found in supermarkets contain palm oil. Despite the existence of alternatives, such as soybean oil and sunflower oil, the prices of these products have risen in tandem, with soybean oil up 150 percent over the past year and sunflower oil in Ukraine more than doubling in price. Global food inflation concerns are growing, and the related inflation rate has risen to a seven-year high.
The largest importer of palm oil is India, followed by China. Although the oil faces headwinds in Europe and the U.S. because of concerns that its cultivation will lead to deforestation, rising edible oil prices could increase costs for companies such as Unilever, which buys about 1 million tons of palm oil, palm kernel oil and its derivatives each year. Used in products such as ice-cream, cosmetics and soap, making it one of the world’s largest purchasers.
The report cited the industry as saying that consumption in India is particularly at risk due to falling foreign demand and the impact of the global epidemic. China is a very price-sensitive market and high prices are hurting demand, he said. If the prices of food raw materials maintain this upward trend, it is believed that it will prompt a possible change in eating habits, which may completely change people’s food preferences.