Representing 45 percent of the global vegetable oil market, the palm oil production is expected to grow at a Compound Annual Growth Rate (CAGR) of 5.9 percent in the period 2011 to 2020 to reach 84.0 million metric tonnes; majority of the growth is expected to come from Indonesia with a CAGR of 7.8 percent, and production in Malaysia is expected to expand only by 2.7 percent.
Chris de Lavigne, Global Vice President, Consulting, Frost & Sullivan predicts that by 2020 palm oil could become a 84 million tonnes market, represent 45 percent of the global vegetable oil market. He also said that palm oil pricing is a complex matter that is influenced at any given time by one or a multitude of factors can than cause significant volatility at times.
Chris said that weather being so critical to the growth of palm has a large impact on it. He said weather is one of the key factors in the supply equation of oilseeds and palm oil. It is also an important catalyst to price movement, and may be a key catalyst to palm oil prices in 2015.
He also said that Malaysia and Indonesia are at slightly different developmental phases and also have some different policy agendas and objectives. "Indonesia is on a fast track to catch up in the refining and downstream sector and their policies reflect this objective," he added.
India is one the largest importer of palm oil which imports edible oil of Rs 62,000 crore annually. The country’s 60 percent edible oil demand is met through imports and palm oil plays major role, consisting up 70 percent of all edible oil imports.
Palm oil finds a variety of uses covering food, industrial, and fuels sectors, making it a very versatile crop. Palm oil is predominantly consumed for food applications. In the last decade, palm oil consumption for Biofuel has increased considerably.