Oleochemicals Fashion Long-Term Optimism from Near-Term Gloom

Abstract

When an industry is facing such problems as steeply rising prices of its raw materials while the prices of competing materials slump, and intensifying competition on a worldwide basis is shaking up the industry's basic structure, it might be excused for some gloom. But even with problems such as those facing the oleochemicals industry, it remains surprisingly optimistic. Oleochemicals marketers, in fact, believe that in the long run, improved crop yields and plantings will help bring down prices that are now off on a cyclical spurt. They believe that, assuming the oil glut will not be permanent and so will someday end, there will be a concomitant end to the present low prices of major petrochemical feedstocks. Moreover, as specialty oils from now-exotic oilseed crops become more important for specific end-use applications, there is a possibility that growers or crushers can contract directly with customers, getting away from the volatile world of the commodities market. ...