Palm oil prices have hit record highs due to high demand and limited supply

Palm oil prices continued to rise for the third day in a row, hitting a two-year high. This trend is due to increased demand and concerns about a possible reduction in supply in global markets. Against this background, palm oil is becoming one of the key factors in the global food and energy industry.

According to Bloomberg, palm oil exports from Malaysia, the world's second largest producer, increased by 11% in October alone. The largest shipments were sent to India, China and the countries of the European Union, which shows the growing need for this product in the leading importing countries.

The rise in futures prices also confirms the relevance of this product: futures contracts for the delivery of Malaysian palm oil in January rose by 2.9%, reaching a price of $1.102 per ton. This increase, which has been ongoing since the beginning of the year, is driven by increased seasonal demand and the use of palm oil as an alternative source for biofuel production.

Supply problems also played an important role in the price increase. The aging of palm trees and the decrease in the rate of their cultivation partly limit the production possibilities of the industry. This, in turn, creates additional pressure on the market and contributes to the further increase in the price of palm oil, which has already risen in price by more than 30% since the beginning of the year.

Demand for palm oil as a biofuel feedstock is also growing due to its high profitability and environmental benefits compared to traditional petroleum resources. This makes palm oil particularly attractive to countries seeking to expand the use of renewable energy sources.

Analysts predict that the high dynamics of palm oil prices may persist at least until the first quarter of 2025. Continued seasonal demand, tight supplies and support for biofuel development are expected to further stimulate the palm oil market, setting the stage for a further price rally.