As palm oil prices soar in Malaysia and Indonesia, farmers intercrop with timber and coffee

International palm oil prices have soared to the highest level in two and a half years amid concerns about production declines, increased export tariffs, and a flood of speculative money entering the market. According to the Malaysian palm oil futures, prices briefly hit US $1170 a tonne this week, the highest price since June 2022, when global supply concerns were growing about the oil used in frying oil and margarine. One factor concerns production cuts in top producer Malaysia, which was hit by prolonged rains and floods in November. Malaysia’s October production volume was about 1.8 million tonnes, down 7% year-on-year, and according to domestic manufacturers, as decreased production is expected to continue. An increase in export tariffs in Indonesia, another major producer, is also a factor—according to Reuters, Indonesia raised the benchmark price this month from US $961.97 to $1071.67 a tonne and export tariffs from $124 to $178. The proportion of palm oil-based fuel mixed ...