Palm Oil Production Falls in Asia

Drought in Southeast Asia is creating opportunities to export more palm oil to Europe, where the entry of the product is duty free because of the Association Agreement with Central America.

Friday, March 18, 2016

The fall of up to 45% in the production of palm oil in Southeast Asia (the world's leading producer) due to El Niño has opened up an opportunity for Central American countries to export the product to markets such as Europe. This is a relief for the industry, hard hit by reduced demand for biofuels because of the fall in oil prices.

See also: "Oil Palm: Another Victim of Cheap Oil" reports that "... the low supply is affecting the international value, which went from $352 a ton, on August 31, 2015, to $511 per ton (up 42%) at the close of March 17, according to the website The lower production and prices are linked to the opening of the EU market for this product, negotiated in the Association Agreement between Central America and the European Union (EU - CAAA) ".

See also: "Opportunity for Palm Oil in US"

"... Alonso Acuna, manager of the National Program of Palma, at the Ministry of Agriculture and Livestock (MAG), warned that in the short term the situation could improve because of the smaller harvests in Southeast Asia, but problems could reappear in the medium term " and he therefore recommended industrialization in order to add more value to the product and market diversification, placing more products in the EU in order to take advantage of the opening."

See original publication by Bloomberg News

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More on this topic

Palm Oil: Record Export Figures

May 2018

Explained by sales to the Netherlands, last year Central America exported $1.344 billion worth of palm oil and its fractions, 74% more than in 2016.

Figures from the information system on the Palm Oil Market and its Fractions in Central America, compiled by the Business Intelligence Unit at CentralAmericaData: [GRAFICA caption = "Click to interact with graph"]

Rise in Palm Oil Price

April 2016

In the last week the price of a metric ton of palm oil went from $560 to $710, due to increased demand for the product to be used as biofuel and the fall in production in Asia.

The rise in biofuels and the fall in production of palm oil in Asia, the world's leading supplier, has benefited the price of oil derived from these plantations worldwide, rising from $560 to $710 in the last week of March.

Opportunity for Palm Oil in US

August 2015

The FDA has determined that partially hydrogenated oils are not considered safe, opening up a space to others with smaller amounts of saturated fat, such as palm oil.

From a statement issued by the Foreign Trade Promotion Office:

In June 2015 the Food and Drug Administration (FDA) of the United States determined that the partially hydrogenated oils (PHOs), the main source in the food industry of saturated fat will not be considered safe (known as GRAS status) in food. The intensification of regulatory controls for saturated fats is causing a reformulation of the food industry, opening the door to more sustainable resources such as oil palm.

The Oil and Fats Industry in Nicaragua

May 2014

In 2013 49 million kilos of oil and fats were sold abroad generating $78 million.

The oil industry in Nicaragua consists of the companies Agroindustrial de Oleaginosas, Agrosa, E. Chamorro Industrial, S.A., Aceitera Corona and Aceitera El Real, and the four between them currently have 13,000 and 14,000 hectares under production.

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