People wait in long queues to buy goods, other countries can only “cry”
Experts warn that the price of cooking oils such as soybean oil, sunflower oil and rapeseed oil will increase after Indonesia suddenly announced a ban on palm oil exports. Risk of shortage of cooking oil and high oil price.
Vegetable oil is scarce, prices are climbing
The main cooking oils are in shortage due to the influence of the weather and the Russia-Ukraine crisis. The suspension of Indonesian exports will put stress on price-sensitive consumers. Because in Asia and Africa are suffering from rising fuel and food prices.
James Fry, president of commodity consulting firm LMC International, told Reuters: “Indonesia’s decision will not only affect palm oil demand. It also affects vegetable oils all over the world“.
People queue to buy cooking oil in Palembang, Indonesia.
Palm oil is used in so many things. From cakes, fried foods to cosmetics or cleaning products. This type of oil accounts for nearly 60% of global vegetable oil shipments. Indonesia is currently the leading oil producer. The country’s oil accounts for about a third of its total vegetable oil exports.
The export ban was announced on April 22 and is in effect until further notice. The aim is to address the increase in domestic prices.
Mr. Fry added: “This comes as exports of all other essential oils are under various pressures. Soybean oil is due to drought in South America. Canola oil due to crop failure in Canada. And sunflower oil due to the impact of the crisis between Russia and Ukraine“.
General difficult situation due to lack of cooking oil
Rasheed JanMohd, President of Pakistan Edible Oil Refiners Association (PEORA) said:No one can make up for the loss of Indonesian palm oil. Every country will suffer“.
The price of vegetable oil has increased by more than 50% in the past half year due to many factors. Like the shortage of manpower in Malaysia. Until the drought in the largest soybean and canola oil exporters such as Argentina, Canada had to cut supply.
Shoppers were expecting a good sunflower season from Ukraine. It’s a top oil exporter, so that might ease the situation. However, supplies from Kyiv had to be stopped because of the crisis between Russia and Ukraine.
Atul Chaturvedi, president of the trade body Solvent Extractors Association of India (SEA), said that this has forced importers to stockpile palm oil to fill the gap in supply. when Indonesia’s ban brings consecutive disadvantages to shoppers. People will be short of cooking oil.
Vegetable oils are also starting to increase in price and become scarce.
“Importers such as India, Bangladesh and Pakistan will try to increase the amount of palm oil purchased from Malaysia. However, the world’s second largest palm oil producer still cannot meet it. Malaysia accounts for 31% of global palm oil supply, behind Indonesia with 56%”, said Mr. Atul Chaturvedi.
Normally, Indonesia supplies nearly half of India’s imported palm oil. While Pakistan and Bangladesh import nearly 80% of palm oil from Indonesia. In February, the price of vegetable oil hit a record high. The reason is the interruption of sunflower oil supply from the Black Sea region.
A state-backed palm oil corporation in Malaysia spoke about the lack of cooking oil. Countries should suspend or limit the use of cooking oil as biofuel to ensure an adequate food supply. In addition, they also warned of a supply crisis, shortage of cooking oil after the ban on Indonesian palm oil exports was issued.
Palm oil is also used as a feedstock for biodiesel production. Indonesia and Malaysia are required to mix biodiesel with a certain amount of palm oil. The mixing ratio is 30% and 20% respectively. Last month, the two countries remained committed to the mandate despite higher palm prices.
Source: Guardian
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