Palm oil prices soaring worldwide as labor shortages and high prices of fertilizer lead to weak supplies
No solution is in sight to the high prices of palm oil, which is facing low inputs due to labor shortages and soaring prices of fertilizers
. The Council of Palm Oil Producing Countries (CPOPC) said prices will remain strong as palm oil giants Indonesia and Malaysia are not expected to increase their outputs.
Indonesia and Malaysia produce 85 percent of the world's palm oil supply.
Smallholders are also expected to cut their outputs due to the soaring fertilizer costs, which will pose huge challenges to various plantations. Limited use of fertilizers will result to smaller yield like what happened in 2018 and 2019. (Related: Soaring natural gas prices shutting down fertilizer plants that provide carbon dioxide to food suppliers, resulting in worsening food shortages
In a statement, CPOPC said the production of palm oil will remain "constrained with limited upside potential." The council believes the prices will continue to trade in the bullish range of $1,000 per metric tons. The rally in 2022 will also be dampened by higher soybean oil output.
The problem with palm oil supplies is being worsened by increasing demand from the European Union, China and India. Compared to 2020-2021, the EU is expected to import additional 700,000 metric tons, while China will import 400,000 metric tons more from the 2021-22 level. India is expected to import 100,000 metric tons in 2021-22 compared to the previous years.
Higher soybean oil output could also constrain any palm oil price increase in 2022. Due to the tight supply, prices of benchmark crude palm oil futures increased by 31 percent, with the contract hitting a record high of 5,220 ringgit ($1,252.25) a ton.
Fertilizer prices projected to reach record highs in 2022
Fertilizer prices are expected to approach record high levels in 2022
, bringing cost to the farmer up with them. Gary Schnitkey a farm management specialist with the University of Illinois
said prices of major fertilizers in Illinois increased at least 5o percent in 2021, which will translate to higher fertilizer cost in 2022.
An article from Dow Jones
noted the rising price of oil on global markets have also driven fuel prices higher. This resulted to higher prices of goods because truckers, farmers and other users of diesel fuel and gasoline are passing their higher costs along to consumers.
Schnitkey said the present situation is brought about by higher commodity prices, labor shortages, the Wuhan coronavirus (COVID-19) situation and overall strong demand for corn and soybeans, but he clarified that it is unlikely for prices to reach the all-time high levels that transpired ahead of the 2008 financial crisis.
reported that a European energy crisis fanned the flame of rising fertilizer prices, which stoked worries about food inflation. (Related: Food inflation in the US about to reach a tipping point
Meanwhile, the Rockefeller Foundation is calling for a total centralization of the global food supply
in order to solve the "hunger and nutrition crisis" as the coronavirus pandemic increased hunger in children by 50o percent. The foundation termed the aim to globalize the world food system as "Reset the Table."
According to Reset the Table, the only way to solve hunger is for food to be communized and controlled entirely by a global central government. Reset the Table is part of the "Great Reset" being promoted by the World Economic Forum.
Watch the video below to learn how to prepare for food inflation
This video is from Fearless Nation channel on Brighteon.com.
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