Lotte Wellfood adopts AI to forecast cocoa, palm oil prices

(Lotte Wellfood)

Volatile global commodity prices driven by climate change and geopolitical risks are pushing South Korea’s food industry to seek more scientific tools for supply stability.

Lotte Wellfood Co. has introduced an artificial intelligence–based system to predict key raw material prices such as cocoa and palm oil.

The company said Thursday that its AI purchasing assistant analyzes dozens of variables — including weather, exchange rates, inventories, and futures prices — to provide data-driven forecasts that support purchasing decisions. The model has first been applied to raw materials with high price volatility, such as cocoa beans and palm oil, and will gradually be expanded to other essential inputs.

Food companies, which rely heavily on imported raw materials, have long struggled with global price swings that directly translate into cost burdens. Lotte Wellfood expects the AI system to help secure cost competitiveness and ensure stable supply of reasonably priced products to consumers.

The system uses 10 years of data to learn complex correlations between conditions and price fluctuations, then applies current market data to project the most probable future prices. For palm oil, which is particularly prone to sharp swings, the company reported a daily prediction accuracy of about 90 percent.

“The adoption of AI forecasting models marks an important first step in responding flexibly to market uncertainty,” said a company official. “We will continue to strengthen cost competitiveness through innovation and deliver products at fair prices.”