Palm oil is a necessary ingredient in a wide variety of consumer products, from food to soaps. Yet it generates its fair share of controversy; naturally harvested palm oil has been linked to deforestation in Indonesia and Malaysia, and its price is linked to sometimes-volatile commodity markets.
Unilever, the London-based maker of Dove soap and Vaseline, announced Wednesday that it will invest millions of dollars in Solayzme, reports the Wall Street Journal.
Solayzme is a biotechnology firm which believes it can replace palm oil, diesel and even jet fuel with oil harvested from algae. Unilever has faced protests related to its use of Indonesian palm oil, and the price can vary sharply.
Using leftover plant matter like sugar canes or corn husks, Solayzme grows massive tanks full of algae that create oil as a byproduct. Though the product is years of testing and certification away from roll-out into consumer products, it could deliver a promising alternative to an oil that is both environmentally damaging and increasingly expensive.
On the Chicago Board of Trade, palm oil futures for December delivery lost $13.75 to $854.50 per metric ton.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
