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Driven by world population growth and increasing demand for palm oil, palm oil consumption registered the highest compound annual growth rate ("CAGR") of 9.2% amongst the vegetable oils for the 10 years from 1998 to 2008. Prices of palm oil have increased substantially in tandem with growing market demand (based on ISTA Mielke's Industry Report).

Key Growth Drivers

Rising demand for oils and fats

  • Increasing demand for food per capita, especially in Asia, Central & South America
  • Additional demand for non-food applications

Economic advantages of palm oil

  • Lower production costs and higher yield compared to other oil-yielding crops
  • FFB from oil palms display greater resilience against adverse weather conditions hence leading to supply reliability

Growing popularity of palm oil

  • Versatile use in the food industry as well as for non-food applications
  • Amongst 17 major oils and fats produced in the world, world production of palm oil has grown the most, rising with a CAGR of 9.7% from 1998 to 2008
  • Rising world dependence on palm oil as a feedstock for bio-diesel production
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