Global palm oil prices set to soar as Indonesia’s biofuel push tightens supply

Palm oil prices are set to surge as Indonesia ramps up its biofuel plans, a move that is expected to cut supplies available for export from the world’s top producer and deepen a global squeeze, according to a report by The Edge Singapore. Indonesia planned to channel higher volumes of palm oil stocks toward expanding its domestic palm oil-based biodiesel mandate from 40% (B40) to 50% (B50) by the second half of next year, the 12 November report said. The B50 programme is part of Indonesia’s efforts to cut its fuel import bill while reducing greenhouse gas emissions (GHG). However, the initiative – alongside stagnating output growth in the world’s biggest producers – could drive up global prices, shift flows of vegetable oils and increase food inflation if buyers were forced to seek costlier alternatives, The Edge Singapore wrote on 12 November. Palm oil prices had fluctuated as investors weighed increasing stockpiles and uncertain demand – at the time of the report, prices were ...