Farm Progress America, Nov. 14, 2024

Mike Pearson takes a look at the price of soybean oil and the relation to palm oil.

The price of soybean oil has been climbing since this summer.

In fewer than 60 days, the price of palm oil has doubled since 2022 in Malaysia. The result has been U.S. farmers reaping the benefits due to increasing soybean prices.

The palm oil price rally has two factors: Tight oil supply and ongoing low production in Indonesia and Malaysia.

The palm oil production level has been flat for several years as plantations in Southeast Asia age.

Plus, the clearing of forests has stopped new plantation growth.

In addition, palm oil production was down substantially in 2023.

Now, either Malaysia and Indonesia expected to see production growth the remainder of the 2024 season. Plus, below normal rainfall has kept production limited this year as well.

On top of shrinking supply production has been limited this year due to a low rainfall.

In Malaysia, the biodiesel blend is going to increase from 35 percent to 40 percent

The demand for biodiesel or bio-oil has increased causing a rise in prices for soybeans.

The rise in prices for Palm oil has forced some to use soybean oil which has increased the price of soybeans.

In addition, all eyes are on President-elect Trump's administration and the tariffs and how they could impact prices.

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Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, farm broadcaster and host of This Week in Agribusiness .