Vegetable oils: a bullish outlook globally and locally

Global food prices saw rapid increases from the second half of 2020, reaching a 10-year high in October 2021 (see Graph 1), as shown by the Food and Agriculture Organization of the United Nations’ Food Price Index (FPI). While all sub-indices (grain, vegetable oil, dairy, meat and sugar) contributed to the high FPI, that of vegetable oil showed the most significant increase over this period (see Graph 2). This column explores the reasons underpinning high vegetable oil prices.