Indonesia has announced a stop to palm oil exports. A problem that, associated with the shortage of sunflower oil due to the Russian-Ukrainian conflict, will have repercussions globally and could raise the prices of hundreds of commonly used products
Don't store avocado like this: it's dangerous
Indonesian President Joko Widodo has announced that Indonesia will suspend palm oil exports "until further notice" in an effort to secure local supplies.
Indonesia's move, as the president said, is designed to "ensure the national availability of cooking oil" and help keep it accessible for the population.
A decision which, however, is no small problem for the rest of the world. In fact, keep in mind that this Southeast Asian country is the world's largest producer of palm oil.
Friday's announcement has already pushed up the prices of this commodity. Crude palm oil futures in Malaysia jumped nearly 7% but then eased slightly after the announcement that crude palm oil will be exempt from the restrictions. Therefore, the block on exports from Indonesia will only concern the refined product.
It is of 'Refined, bleached and deodorized palm olein (RBD), a more processed product that accounts for 40% to 50% of Indonesian exports, according to analysts.
The “perfect storm” of vegetable oils
The Indonesian ban comes at a bad time for global consumers. Already in March, world food prices jumped to their highest levels ever, the United Nations Food and Agriculture Organization (FAO) said earlier this month.
The stop of exports of palm oil from Indonesia can only add fuel to the fire, considering how many products require a vegetable oil like this for their realization.
James Fry, president of commodity consultancy LMC International, called this the “perfect storm”. A further increase in prices, in fact, seems almost physiological, also considering how much companies are already severely tested by the lack of sunflower oil due to the Russian-Ukrainian conflict.
The shortage of sunflower seeds, which come mainly from Ukraine, led companies to look for alternatives to use in their products and the choice fell, as expected, mainly on palm oil. But here is a new problem. Read also: So palm oil is about to re-enter our foods (but it never really went away)
Furthermore, other alternative oils such as soy and canola are also not doing very well, as supplies from South America and Canada are smaller due to drought and crop shortages.
As Fry stated:
Indonesia's decision not only concerns the availability of palm oil, but also of vegetable oils worldwide. This is happening when export tonnages of all other major oils are under pressure: soybean oil due to the drought in South America; rapeseed oil due to disastrous rapeseed harvests in Canada; and sunflower oil due to Russia's war against Ukraine.
In short, the prices of all vegetable oils are set to rise. Alternatives are increasingly scarce and expensive.
Importers such as India, Bangladesh and Pakistan will try to increase purchases of palm oil from Malaysia, but the world's second largest palm oil producer cannot bridge the gap created by Indonesia.
Plan B of replacing sunflower oil with palm oil could therefore fail. Coldiretti recommends taking advantage of the situation to use local and healthier products:
Indonesia's decision to ban the export of palm oil must be an opportunity to accelerate its replacement with healthier products with a lower environmental impact such as butter, olive oil or hazelnut oil used historically in the first spreadable creams.
What will happen and how much prices will rise we will find out, probably at our expense, in the coming months.
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Fonti: Reuters / CNN
Read also:
- Palm oil contaminated with carcinogenic Sudan IV in Ghana
- Nutella: Ferrero stops using Malaysian worker-flavored palm oil
- From biscuits to tuna: sunflower oil is running out, now we risk the return of palm oil
- Here is what lies behind sustainable palm oil: child exploitation and violation of human rights
- Sustainable palm oil does not exist, UN word (PHOTO)
- Palm oil is still a huge problem (and hides abuse, violence and child exploitation)
