| Welcome to our guide to the energy and commodities markets powering the global economy. Today, reporter Bernadette Toh takes a look at the potential fallout from palm oil’s price surge. Palm oil’s track record as an affordable and plentiful crop makes it ubiquitous on store shelves in products from cookies to cosmetics, but a price rally threatens that dominance. The tropical commodity relinquished its status as the world’s cheapest vegetable oil to soyoil this year when prices surged on concerns around constrained production in Malaysia and Indonesia, and plans to divert more supply to biofuel. Should that premium persist, makers of baked goods and beauty products face some tough decisions: absorb the higher cost, pass it on to consumers or tweak their recipes with less-expensive alternatives. Brazil’s M Dias Branco SA — a producer of biscuits, pasta and cakes — already started using soybean oil as a palm substitute. Swapping isn’t always simple, though.  A worker harvests palm oil fruit in West Java, Indonesia. Photographer: Dimas Ardian/Bloomberg Cosmetics are precisely formulated to avoid causing irritation, and food makers worry that altering recipes can affect taste. Palm is relatively neutral, while oils derived from olives or coconuts typically have a distinct flavor, limiting their viability as substitutes. “The final product will be messed up if producers just switch to other oils,” said Sathia Varqa, a senior analyst at Fast Markets Palm Oil Analytics in Singapore who sees palm prices easing after rallying more than 25% this year. Soybeans are predicted to be plentiful, with a bumper harvest forecast for Brazil, and the US Department of Agriculture expects global demand for palm relative to soybean oil to be the tightest in three years this season. For the palm sector, there’s no quick fix to the production woes. Farmers in Malaysia and Indonesia are hesitant to replant old trees, which take years to bear fruit, and a crackdown by Europe on deforestation is making it harder to clear new fields.
That risks even higher prices and a persistent premium. --Bernadette Toh, Bloomberg News As the worst air pollution in years descended on India’s capital, the country’s health minister wasn’t in New Delhi coordinating a response. Instead, he was 800 miles away, campaigning in a state election. Prime Minister Narendra Modi, meanwhile, was overseas for the Group of 20 summit. Neither have commented on the toxic mix, which studies show has been killing at least 1 million people a year. US prosecutors charged Indian tycoon Gautam Adani with helping drive a $250 million bribery scheme for solar energy contracts in a stunning blow to a close ally of Modi. Adani Group units’ shares and bonds tumbled. Trafigura Group is reducing its share buybacks this year as a drop in profits coincides with a generational succession at the top of the commodity trading giant, according to people familiar with the matter. Saudi Arabian Oil Co. plans to take on more debt and will focus on “value and growth” for its dividend over the long term, the company’s finance chief said. HSBC Holdings Plc has abandoned plans to build a carbon credits desk, according to people familiar with the matter, as Europe’s biggest bank cools to a market rocked by repeated allegations of greenwashing. Europe is gaslighting itself about its energy woes, writes Bloomberg Opinion’s Javier Blas. As gas prices rise, politicians are in denial about the challenges a cold winter may pose. -
US President-elect Donald Trump’s choice of Chris Wright as energy secretary is celebrated and condemned because of the latter’s views on fossil fuels and climate change, Foreign Policy writes. -
Big oil and gas firms are surprise proponents of the Paris Agreement, which seeks to defend ambitious targets to curb global warming, the Conversation writes. -
Unbearable heat in China’s megacities reveals the future many of us face but also suggests ways we can adapt, New Scientist writes. | 
