Edible Oil Prices to Hike Further as Indonesia Bans Export of Palm Oil; Know Details


The price of edible oil in India is likely to shoot up as Indonesia recently announced a ban on export of palm oil owing to local shortage. Edible oil price in India has already fallen prey to rising inflation, and middle class consumers are likely to be most affected by the move. Indonesia has announced that it will put a ban on export of palm oil from April 28, even as the country accounts for more than 50 per cent of the world’s supply of the same.

The country announced plans to ban exports of the most widely used vegetable oil on Friday, in a shock move that could further inflame surging global food inflation. In a video broadcast, Indonesia’s President Joko Widodo said he wanted to ensure the availability of food products at home, after global food inflation soared to a record high following Russia’s invasion of major crop producer Ukraine. “I will monitor and evaluate the implementation of this policy so availability of cooking oil in the domestic market becomes abundant and affordable,” he said.

India is among the biggest importers of palm oil from Indonesia, and will hurt the country once the ban comes into place. Palm oil is extensively used in India — from processed food and cosmetics to biofuels. Palm oil is also used to make several products globally, including biscuits, margarine, laundry detergents and chocolate.

Vegetable oils are among a number of staple food items that have reached all-time high prices in recent weeks following Russia’s invasion of agricultural powerhouse Ukraine, according to the United Nations Food and Agriculture Organization. Soybean oil, the second most used vegetable oil, rose 4.5 per cent to a record high of 83.21 cents per pound on the Chicago Board of Trade.

For India, a halt in palm oil supply from Indonesia would mean a loss of about 4 million tonne of the edible oil each month, as per Mint. “Experts said that India’s sunflower oil supplies had halved to nearly 100,000 tonnes per month following the Ukraine war and this could make things worse for households,” the media organisation said in its report.

“This move is rather unfortunate and totally unexpected,” Atul Chaturvedi, president of trade body the Solvent Extractors Association of India (SEA), was quoted as saying by Reuters.

India’s wholesale inflation has already risen to a months’ high  in March amid several price hikes in commodities following the Russia Ukraine war. The Wholesale Price Index (WPI) rose 14.55 per cent in March to a four-month high. The ban on export of palm oil by Indonesia would mean another set of price hikes in the coming months despite the government’s efforts to promote an indigenous supply of the edible oil.

(With inputs from agencies)

Read all the Latest News , Breaking News and IPL 2022 Live Updates here.


Source link