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Palm oil: the biodiesel challenge

Author

Listed:
  • Tancrède Voituriez

    (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVD - Université de Perpignan Via Domitia - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier - UMPV - Université de Montpellier Paul-Valéry)

Abstract

Palm oil prices rose again in 2024, driven by a poor harvest in the main producer, Indonesia, and by the decline in export volumes available in the archipelago due to the priority given to domestic biodiesel production. With no more land available and yields levelling off, Indonesia, like Malaysia, the second largest producer and exporter of palm oil, is now struggling to satisfy consumer appetite for this historically abundant and cheap oil. The palm fruit remains the most profitable source of vegetable oil in the world, but this agronomic advantage does not exempt producers from the need to innovate more to improve yields and the resilience of plantations to climatic hazards, to uproot and replant even if it costs, to increase the wages of a workforce that is now less loyal and more demanding, spending more to earn more, in short, moving from the exhaustion of a rent to the conquest of a yield. After starting the year at $845/t, palm oil reached $1,200/t in December 2024 and looks set to move above the $1,000 mark throughout 2025. Subtracting export volumes to supply the domestic biodiesel market is done in the blink of an eye, but improving cultivation practices and investing in the rejuvenation of plantations is a whole other matter.

Suggested Citation

  • Tancrède Voituriez, 2025. "Palm oil: the biodiesel challenge," Post-Print hal-05246323, HAL.
    • Handle: RePEc:hal:journl:hal-05246323
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