Palm Oil - Economic Indicator

August 15 2009
I also subscribe to Palm Oil HQ Daily Update based in United Kingdom. In the August 15 issue, Palm Oil was declared as an Economic Indicator. Palm Oil has become an accurate measure of the global markets. This recognition surely would boost up palm oil's image. I quote the article as follows:
"For years, economists, along with everyone else, thought of palm oil as exactly what it looked like: a pinkish, sludgy irrelevance. People knew it was used to make food and soap....In 2009, palm oil has not changed its colour or texture, but as an economic indicator, it is unrecognisable. In a world of food and economic crises, of credit implosions, green politics and the rise of Asia, it has become the guage that straddles them all - the ultimate global speedometer. Through its price fluctuations and ever-changing trade destinations. palm oil has become an accurate measurement of hundreds of global markets. It versatility is the key, which is the main reason why the world consumes 42 million tonnes a year - twice as much as it did a decade ago. Palm oil demand is a reading of a global population trying to feed and power itself under challenging circumstamces. "
The article cited a few examples of palm oil as an economic indicator. The growth of palm oil has tracked the rising wealth of the middle classes in China and India, the big traditional markets of palm oil. As a biofuel stock, palm oil can meet a similar demand with energy, offering an alternative strategy when the markets are knocked out of kilter. In Malaysia and Indonesia, whic between them meet about 87% of the global demand, palm oil price movements dictate government policy, shape economic prospects and draw billions of foreign direct investments(FDI). Malaysian Palm Oil - No 1 in the World.