Most people are used to only paying a few dollars per bottle of most types of vegetable oil. However, prices for vegetable oil might change in the near future, according to the World Bank. In their semi-annual commodity markets outlook report, the World Bank revealed that prices on vegetable oil would likely grow this year. That said, there is some good news: the same report also mentioned that prices should stabilize sometime in 2022.
For the time being, though, consumers should prepare themselves for higher prices on vegetable oils.
Palm and soybean oil prices increase
Palm oil and soybean oil are used in many households across the globe for cooking, skincare and much more. In fact, palm oil and soybean oil make up 60 percent of global production of vegetable oils. The average price for palm oil is expected to be around $975/mt in 2021, which is much higher than industry watchers predicted. In Europe, the average price for crude palm oil is expected to be around $925/mt.
Causes of this price increase
There are several reasons for the upcoming price increase in vegetable oils. For one things, the COVID-19 pandemic caused a worker shortage all across the globe, including in Indonesia and Malaysia. The pandemic prevented foreign workers from returning to their jobs in Malaysia, and since Indonesia and Malaysia account for about 85 percent of the world’s palm oil production, their workplace shortages are a major driving force in the palm oil price increase.
Despite the shortage of workers, demand for vegetable oils remains stable. While this might seem like a good thing, it’s actually causing major issues for countries like India. India is one of the largest importers of vegetable oils, and is currently unable to keep up with demand.
When will prices stabilize?
While it’s hard to predict the future, the World Bank predicts the vegetable oil markets will start to stabilize sometime next year. According to the World Bank, prices should continue to steadily decline up to the year 2025. Some things are already being done to bring down the price of vegetable oils. For example, India is cutting its import duty on crude oil from 15 percent to 10 percent. They are doing this in hopes of bringing down edible oil prices in the process.
Not only are vegetable oils used for cooking, but they are also a main ingredient in many products. This shortage is sure to cause major problems for certain companies. However, the shortage will hopefully only be temporary. It’s important to stay focused on the future and avoid getting bogged down by these increased prices.
Some may try to take advantage of the upcoming increases in vegetable oil prices. That’s why it’s important to only purchase products from a reputable supplier. A reputable vegetable oil supplier will provide quality products at fair prices. Be sure to check out all the great products offered through Olivamed LLC. We also offer a number of services for those working in the food and retail industries, including oil bottling, manufacturing and more. Reach out to learn more about our services and products!
Categorized in: Olive Oil Supplier