palm oil investments in singapore
Palm oil counters
Recently the Stocks of Singapore-listed palm oil companies suffered heavy a selldown as palm oil prices fell. the golden question however, is where will palm oil prices be 1 - 2 years from now ?
With fossil fuels so high + rampant inflation in Asia + worldwide pressure from food supplies, this can be quite a mess.
Biofuels and food supply pressures
should the western corporations be forced to drop their silly insistence on using CORN and SOYABEANS to make ethanol, i am sure the prices of both plant products and livestock will take a breather.
the world is facing food scares, not shortage but ’scares’. the richer nations may have money to throw around but in many poor nations where the surplus food is coming from, inflation is forcing their governments to curb exports in order to push the food prices down.
where does this leave the rich, developed and in need of importing food nations ? There is a reasonable chance that Palm oil/Jatropha may replace the current western insistence on using edible food for their biofuels.
Assuming that pressure from food supplies force western corporations to switch totally or partially to using palm oil/ jatropha to fulfill their biofuel demands, now would be a good time to take a double look at those palm oil counters we have here in singapore…
the weakness of bio fuel investments
the recent selldown in palm oil stocks show that this industry is still much affected by short term price movements. probably it is still viewed by most of the world as a “maybe/maybe not” thing instead of an “established energy choice” like oil,coal,wind power,hydropower…etc etc
aside from biofuel, palm oil is also used for cooking and making household items like soap. needless to say, its rise in price has also contributed somewhat to inflation, but not as directly as using corn/soyabean for ethanol does.
for now…palm oil is widely used only in Asia and subjected to price controls from the different Asian governments. Ironically, if palm oil ever gets accepted in the west as a biofuel and their raw material price surges, it is the consumers in the palm oil producing nations who will suffer.
will a surge in palm oil be followed by poor Asian nations imposing export bans ? i doubt so..
Stumble it!