13/11/2007 (Poynter Online) - Marketplace radio has a story about the soaring price of palm oil, corn oil and other vegetable oils. The Marketplace story says about one third of the world's vegetable oil comes from palm trees. For the last decade, palm oil has traded for about $450 a ton. Now it sells for more than double. Palm oil is the cheapest vegetable oil. Prices rose by 40 percent in 2006.
Eventually, consumers will pay the price in higher costs for everything from margarine to salad dressing. The real expenses are to companies that use these oils in large volumes, such as bakeries and restaurant chains.
Don't overreact to the story. Americans only spend about 7 percent of their income on food. There are other issues, however. Palm oil is being used in biodiesel fuel production. Ecologists worry that with high palm oil prices, forests and wildlife habitats will be destroyed in favor of palm oil cultivation.