Cooking oil manufacturers have warned of a looming shortage of the commodity in the country.
This is after the world’s biggest palm oil producer, Indonesia, banned oil exports due to adverse weather and Russia’s invasion of Ukraine.
The ban will be effective from Thursday 27th April 2022, which means prices of all major edible oils including palm oil, soyoil, sunflower oil, and rapeseed oil will go higher.
“Indonesia’s decision affects not only palm oil availability, but vegetable oils worldwide,” James Fry, chairman of commodities consultancy LMC International said.
Pwani Oil Commercial Director Rajul Malde, on Tuesday, said, if that news is confirmed, then the supply will be okay because the ban is only restricted to by-products and derivatives of palm oil and not crude, if not, the availability of the commodity will be affected.
Indonesia accounts for around a third of all vegetable oil exports, the move is to help tackle rising domestic prices.
“This is happening when the export tonnages of all other major oils are under pressure: soybean oil due to droughts in South America; rapeseed oil due to disastrous canola crops in Canada; and sunflower oil because of Russia’s war on Ukraine,” Fry said.
Malde on the other hand, revealed that they have been forced to raise retail prices of cooking oil by 35 percent since February due to the 45 percent increase in the cost of importing palm oil into the country.
“We have tried to minimize the cost to consumers by being creative and innovative with other parts of the supply chain, but overall we have had no choice but to increase the prices,” he noted.
Buyers were hoping the sunflower crop from top exporter Ukraine would ease the tightness, but suppliers from Kyiv have stopped because of what Russia calls its “special operation” in the country.