Yellow was thought to be the color of royalty, and using it on pencils represented a mark of distinction and status. As the popularity of graphite pencils grew in Europe, pencil makers in countries such as Germany continued the tradition of using yellow, further reinforcing its association with quality and prestige.
Another reason for the popularity of yellow pencils is that the material used for the outer casing, typically wood, is often yellow naturally. Some types of wood, such as cedar, have a yellowish color when processed, which eliminated the need for additional coloring.
While yellow pencils remain widely popular, the modern manufacturing processes allow for a wide range of colors and designs, catering to different tastes and preferences.