Fear of cooking oil shortage, spike in prices as 290,000 tons stuck in Indonesia | Latest News India

Indonesia President Joko Widodo’s drastic measures to control food prices by banning palm oil exports have come into effect from Thursday. India is the world’s biggest importer of palm oil and relies on Indonesia for nearly half of the 700,000 tonnes it takes every month. Palm oil industry officials in India told news agency Reuters that the ban has trapped at least 290,000 tonnes of the edible oil meant to be headed to India at ports and oil mills in the world’s top producer.

According to the officials, the disruption in shipments after Indonesia widened its export ban to include crude and refined palm oil will create a vegetable oil shortage in top importer India. They added that Malaysia, which is the second-biggest exporter, is already struggling to meet higher demand levels.

“Our vessel of 16,000 tonnes is stuck at Kumai port in Indonesia,” said Pradeep Chowdhry, managing director of Gemini Edibles & Fats India Pvt Ltd, told Reuters. Chowdhry’s firm buys around 30,000 tonnes of Indonesian palm oil every month.

With limited options left now, companies are now rushing to make purchases from Malaysia.

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But Kuala Lumpur, Sandeep Bajoria, chief executive of Sunvin Group, a vegetable oil brokerage and consultancy firm lamented that it cannot fill the demand as Malaysian sellers are obliged to meet their old commitments and cannot provide palm oil for prompt shipments.

“There would be shortage in the market. There is no way to increase supplies,” Reuters quoted Govindbhai Patel, managing director of trading firm G.G. Patel & Nikhil Research Company, as saying.

Last week, Widodo had imposed an export ban that covers nearly all palm products, which are used in staples like cooking oil, saying people’s need for affordable food trumped revenue.

The move boosted his rating four points to 64.1 per cent in an independent survey of about 1,200 people conducted from April 20-25 – recovering slightly from when it slumped to 59.9 per cent earlier this week but still lower than the record high 75.3 per cent he enjoyed in January, news agency AFP reported.

Meanwhile reports also indicate that Indonesia’s palm oil industry association GAPKI is working with government agencies and state companies to ensure the supply and affordability of cooking oil.

The association in a statement said it hopes the government would take follow-up measures to tackle rising cooking oil prices, warning a prolonged ban on exports of crude palm oil and its derivatives would hurt companies, smallholder planters and refineries.

(With inputs from agencies)