Palm Oil Emerges as Strategic Global Commodity Amid Trans Fat Bans and Trade Shifts

World 27.03.2025

Source: DairyNews.today

Driven by mounting global health concerns and regulatory action against industrially produced trans fats (iTFA), palm oil is rapidly positioning itself as a preferred alternative in food manufacturing. With cardiovascular disease remaining the leading global cause of death, linked in part to iTFA consumption, governments are moving decisively to eliminate harmful fats from consumer diets according to the report "Malaysia's Palm Oil Boom in Eastern Europe: Key Trends and Growth Opportunities".

Palm Oil Emerges as Strategic Global Commodity Amid Trans Fat Bans and Trade Shifts

As of 2025, over 60 countries have adopted best-practice policies, including national bans or restrictions on partially hydrogenated oils (PHOs), once a common ingredient in processed foods. The World Health Organization’s REPLACE initiative has further accelerated global alignment on trans fat elimination.

Palm oil, naturally free fr om trans fats and cholesterol, offers a semi-solid structure at room temperature—making it ideal for reformulating food products without the need for hydrogenation. Endorsed as safe by the Codex Alimentarius, it is now used in a wide range of applications, including margarine, shortening, instant formulas, and dairy fat replacements.

In parallel, Malaysia has emerged as a key supplier, particularly to Eastern Europe, wh ere palm oil exports nearly doubled in 2024, reaching 96,903 tonnes. Countries like Georgia, Latvia, and Romania are becoming crucial hubs, leveraging their logistics infrastructure to re-export to neighboring markets including Russia and Belarus.

Beyond health and supply dynamics, palm oil is also benefiting fr om its role in sustainability. Malaysia’s MSPO-certified palm oil offers traceability and compliance with global environmental standards—appealing to manufacturers under increasing ESG scrutiny.

Market Outlook: Competitive Pressures and Emerging Demand

Palm oil prices, which rose 3.3% in February, are expected to remain volatile through March, fluctuating between RM4,400 (USD986) and RM4,600 (USD1,031). Competitive pricing from soybean oil and declining demand in traditional markets like India and China may dampen near-term growth. However, demand is expected to remain strong in emerging markets, particularly Sub-Saharan Africa, wh ere population growth is reshaping consumption trends.

Meanwhile, structural shifts in biodiesel markets, especially in the U.S., and logistics realignments in Asia are pushing palm oil producers to diversify exports and explore new industrial applications—from cosmetics to bakery fats.