Palm oil companies set sights on Africa
The story reported Southeast Asian palm oil companies were looking to the African continent in a bid to meet growing demand, while the U.S. Department of Agriculture (USDA) predicts a 246,000 ton supply deficit in the year to September.
Even though land in Africa can be comparatively cheap there are many hidden costs such as a lack of clear land titles and poor margins, while social tensions can arise if local people do not benefit from the projects, the story reported.
The world's largest listed palm oil company by plantations Sime Darby, holds a 220,000 hectares concession in Liberia, while Singapore-based Golden Agri Resources aims to invest in a US$1.6 billion plantation in the West African country.
"Those who have announced their expansion into Africa, for example Sime Darby, are only looking for first mover’s advantage," Citigroup analyst Penny Yaw was quoted as saying.