LONDON – The price of oil has dropped significantly as demand for alternative sources of supply in Asia has plummeted in recent months.
The UK has been hit by the drop in demand for coconut oil, used in the tanning and cosmetic industries.
Oil analysts have said that coconut oil has seen an almost 50% drop in use in Malaysia and China since January this year, when the government imposed a ban on the oil.
Oil prices have also been impacted by China’s plans to import about 10 million tonnes of palm oil this year.
China imported about 8 million tonnes last year, down from 12 million tonnes in 2015.
In Thailand, the country with the largest export market for palm oil, the market was up by about 7% last year to about 7.6 million tonnes, according to the country’s Department of Industry and Information Technology (DICT).
Oil producers in Asia, which have traditionally been reliant on imports from the United States, have seen their markets and revenues shrink.
The U.S. is also facing a decline in the oil price as President Donald Trump’s administration ramps up efforts to impose tariffs on Chinese goods.