Palm Oil

The cheapest and most used vegetable oil, from Indonesian and Malaysian plantations.

Overview

Some 75 million tonnes yearly, over a third of all vegetable oil, come from Indonesia, the dominant producer and exporter, and Malaysia. The Malaysian derivatives exchange trades crude palm oil in 25 tonne lots, the world vegetable oil benchmark, moving with Chicago soybean oil and Chinese demand. Biodiesel mandates, Indonesian B35 blending among them, tie it to energy, and export taxes and levies swing trade to India, China, and Africa, the top buyers. El Nino dryness cuts yields a year later, and migrant labor conditions set Malaysian harvests. Sustainability pressure over deforestation shadows a crop that yields far more oil per hectare than any seed.