The oils and fats sector had shown record that both its production and consumption had increased at almost the same rate in the past. Any differences between them will indicate either an oversupply or shortage situations of oils and fats in the world; oversupply occurred when production exceeded consumption and shortage when otherwise. Thus, world production and consumption of oils and fats in 1976 were 45.9 and 47.3 million tonnes respectively (shortage) while in 2009 both were at about 163.9 million tonnes (almost equilibrium).

From all the 17 oils and fats, palm oil emerged to be the significant player that helps expansion in the production and consumption of the oils and fats. It appeared to be one of the smallest oil being produced and consumed in 1976 (1.6% and 6% of the world production and consumption of oils and fats respectively) and gradually surged to become the world largest produced and consumed oil in 2009 (both at 28% of the world production and consumption of oils and fats).

Malaysia and Indonesia are the two main producers of palm oil which is being consumed in all over the world. Palm oil will continue to be the main oil produced due to its highest productivity and as such the main oil to be consumed in future due to its relatively cheaper price and comparatively a healthy oil. Its production in Malaysia is expected to be about 17.8 million tonnes while Indonesia about 23.5 million tonnes in 2010.

Future palm oil supply will come mainly from Indonesia. Although Malaysia is facing land constrain to expand its oil palm area, increase in future production from this country is expected through an increase in its productivity. While palm oil sustained at the premier position, its price, however, fluctuates together with other oils and fats. Palm oil price associated closely with its main competitor, soybean oil, price and lately with price of crude petroleum price. However, due to the complexity of the oils and fats sector, other factors may need to be considered in evaluating price of palm oil. As such, its price is projected at RM2,500 per tonne in 2010.