Palm oil demand may gain 3% in '12

Global demand for palm oil is expected to climb next year as China and India, the largest buyers, continue to drive growth and the supply of substitute cooking oils drops, said the Indonesia Palm Oil Board.

Consumption may increase two-three per cent from an estimated 40 mt this year, said Derom Bangun, a vice-chairman of the Jakarta-based producers and refiners group.

"Supply and demand conditions will remain tight," Bangun said in an interview in Bali, Indonesia, on Thursday. "Biodiesel producers may use more canola and other vegetable oils, reducing supply for the food industry, which will benefit palm oil." Increased purchases may limit a 19 per cent plunge in prices this year of the tropical oil, used in everything from cookies and potato chips to detergents and fuel, on concerns that a deepening European debt crisis would slow the global economy and curb demand. Indonesia and Malaysia supply about 80 per cent of the world's most-consumed cooking oil.

 

Production and exports from Indonesia, the largest grower, may increase as much as nine per cent next year, said Bangun. The Southeast Asian country is estimated to produce 24 mt and export 18 mt this year, he said.