Playing The Growth In Palm Oil

The growth in palm oil usage could be a great long term trend for investors to play. Used as cheap cooking medium, the oil is quickly becoming the staple fat for Asian diets. Demand for the oil is up and has seen its futures price steadily over the past few trading sessions.

Cooking aside, the real growth for palm oil can be had as an alternative fuel. Increasing energy costs in developed countries combined with economic growth in Asia’s emerging markets are calling for new energy supplies. Palm oil can be refined into bio-diesel and it’s cheaper than crude oil. Increased ownership of cars and motorbikes within Emerging Asia will help buoy palm oil prices.

The fruit from the oil palm tree grows best in the tropical climates of Malaysia, Indonesia and Singapore. Malaysia is the largest grower and exporter of the oil and can be played via the iShares MSCI Malaysia Index (NYSE: EWM). The iShares MSCI Singapore Index (NYSE: EWS) and Market Vectors Indonesia ETF (NYSE: IDX) give access to those nations.