Palms of prosperity: What’s in store for 2024?
THE word ‘palm oil’ provokes different reactions depending on who you say it to. For citizens in developed countries, the word can conjure up negative images of deforestation and health concerns but for those in developing countries, the word may merely be associated with regular affordable cooking oil essential to their day-to-day lives.
People’s opinion on the oil crop vary widely and even in Malaysia, the second largest global palm oil producer, the topic ends up being a heated debate as some find the crop to be essential to their daily livelihoods while others may find the industry to be a nuisance.
Regardless of how the crop is perceived, we can be certain that palm oil is an integral part of Malaysia’s economy, outpacing our previous major export industries of oil and gas (O&G), rubber and forestry.
Looking ahead, the palm oil industry’s growth does not seem to be slowing down any time soon as the global palm oil market size which was valued at US$70.44 billion in 2023 is anticipated to grow at a compound annual growth rate (CAGR) of 5.1 per cent from 2024 to 2030.
While palm oil is certainly not the only oil producing crop globally, it remains one of the most efficient due to its highest oil yield per hectare and its versatility due to its suitability to be used in a wide range of consumer products in the realm of food, cosmetics and biofuels.
The oil producing crop has also been receiving an image change over the years as support and intervention from government and industry groups have led to strong adoption of sustainability certifications for majority of planters in the country as well as research into the practical uses of palm oil by-products to turn it into a truly zero waste crop.
As of January 31, 2023 a total of 5.5 million ha or 97.88 per cent of oil palm planted areas in Malaysia have received the country’s own Malaysian Sustainable Palm Oil (MSPO) certifications
While there is a lot of excitement on how the global palm oil industry will unfold the coming years, the most often discussed topic by not only players, traders, transports and smallholders is where palm oil prices will head to in 2024.