Food vs. Fuel conflict becoming more intense

By 2015, nearly 63 million tons of palm oil will be required, as opposed to the 45.5 million tons produced in 2010, according to Thomas Mielke, executive director for ISTA Mielke GMBH. “Indonesia will need to boost its oil palm plantings to satisfy future world demand,” he said. Palm oil, along with other oilseeds, is facing increasing demand from the food, olechemical and biofuel industries. “The food versus fuel conflict is becoming more intense, especially with limiting factors like land, water and logistics coming into play. There is also a need to source for alternative feedstocks for biodiesel production,” he said. Palm oil expert Dorab Mistry believes that energy prices and their effect on biodiesel will be an important factor in determining palm oil prices this year. “Given the high energy prices and extremely tight palm oil stocks as well as the pent-up demand, I expect the current high CPO prices to remain intact for some time,” he stated. Dorab said that the CPO price outlook would depend on biodiesel demand and production in the second half of 2011. LMC International Chairman James Fry, said the global economy held the key to the outlook for CPO and palm kernel oil (PKO) prices. “As governments raise interest rates and tighten credit to dampen inflation, economic growth will slow down,” he said. (March 11, 2011)