COMMODITIES MARKETS - Palm Oil and Rubber
As a result of increasing demand from developing markets, palm oil prices are expected to increase in 2018. The world’s second-largest producer of palm oil, Malaysia, is expected to increase production by 15.5% this year. A major risk on the palm oil prices is that the European Union is planning to ban the use of palm oil in the biofuel production. This will have a major impact on the Indonesian and Malaysian palm oil exports towards the European Union in the future.
For rubber, while the increasing demand for tires in the automotive sector is encouraging the growth of the market, due to excessive supply in the world market, there may be continued downward pressure on the rubber prices.