2024-02-11 23:00:04
The palm oil market was severely shaken by the pandemic and then the war in Ukraine. In the coming days, he will now have to adapt to the new European regulations on deforestation. An additional constraint which could accelerate the emergence of a two-speed market.
Palm oil neck and neck with soybean oil and sunflower oil, even more expensive, does not happen often, so obviously the importers who are placing orders at the moment are changing their habits to go towards the lowest prices.
In January, Indian imports of palm oil fell to their lowest level in three months, to the benefit of other vegetable oils. But these fluctuations are nevertheless very cyclical, with prices being generally stable for months, with prices half as high as in 2022.
Binding European regulations
However, this could change as European regulations on imported products come into force. A text which will prohibit, from the end of the year, the arrival on European soil of raw materials from deforested regions after 2020. A binding law which could split the palm oil market in two, according to several experts.
In Malaysia, but perhaps even more so in Indonesia, we could find tomorrow a traceable palm oil, produced by the largest plantations capable of meeting European regulations, and a downgraded oil, produced by a majority of smaller players. , which will be sold outside the European Union, “ an unlabeled oil whose prices could fall “, this is one of the hypotheses put forward by the authors of the Cyclops report who published their forecast for 2024 in January.
The end of a production model?
In Indonesia and Malaysia, the two giants of the sector, small farms have multiplied in recent years. The pandemic has tested the model of large plantations very dependent on foreign or cheap labor, whose added value is essentially based on economies of scale. Many previously exploited workers became convinced that they could earn more by leaving industrial plantations.
This is one of the reasons which explains the cruel lack of labor in the industrial sector which sees thousands of dollars disappear every day, due to a lack of workers to harvest the fruits which rot on the trees.
For Jean-Marc Roda, regional director of CIRAD in island South-East Asia, the emergence of a double-speed market is the illustration of more profound changes. He does not hesitate to speak of “ the end of a model “, or even a “ secular turning point » in the palm oil sector.
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