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World Bank Predicts Palm Oil Price Decline Until 2025

Adi Ahdiat 08/11/2023 12:50 WIB

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The World Bank predicts that palm oil prices will fall from 2023 to 2025.

World Bank Projection of Average Palm Oil Prices per Year (2021-2025)

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World Bank Predicts Palm Oil Price Decline Until 2025

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World Bank Projection of Average Palm Oil Prices per Year (2021-2025)

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The World Bank predicts that palm oil prices will decline from this year until 2025.

This prediction is recorded in the October 2023 edition of the *Commodity Markets Outlook* report.

According to the World Bank, the average palm oil price throughout 2023 will reach US$920 per ton, approximately 28% lower than the previous year's average (year-on-year/yoy).

Then, in 2024, the average price is predicted to further weaken by 2% (yoy), and in 2025 to fall another 6% (yoy), with nominal details as shown in the graph.

In the October 2023 edition of the *Commodity Markets Outlook*, the World Bank does not detail the factors that could potentially suppress palm oil prices in the next two years.

However, in a previous report, the World Bank stated that the European Union's anti-deforestation policy is a long-term risk factor for the agricultural and plantation industry, including palm oil.

"The main long-term risk for agricultural commodity markets is the European Union's environmental regulations aimed at moderating global deforestation, which will provide long-term benefits to climate change and sustainable agriculture," said the World Bank in the April 2023 *Commodity Markets Outlook*.

"However, these EU regulations also create uncertainty for many food commodities grown in forested areas—such as cocoa, coffee, palm oil, and soybeans," it continued.

Despite this, the World Bank predicts that palm oil consumption for biodiesel production will increase in several countries.

"Demand for palm oil for biodiesel will increase in the two largest palm oil producing countries, Indonesia and Malaysia," said the World Bank in the October 2023 *Commodity Markets Outlook*.

"Indonesia is increasing its biodiesel mandate from 30 percent to 35 percent this year, while the biodiesel mandate in Malaysia is 20 percent," it continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."