Ukraine war has already taken toll on prices of refined, soya and sunflower oil. And now, even palm oil hasn’t remained untouched by the global crisis
After Sri Lanka, now Indonesia is reeling under severe inflation. So much so that one litre of palm oil in this Southeast Asian country now costs a staggering 22,000 Indonesian rupiah! The effect of this turmoil is being felt even in India.
The Ukraine war has already taken a toll on prices of refined, soya and sunflower oil. And now, even palm oil hasn’t remained untouched by the global crisis.
Indonesia is said to be the largest producer of palm oil in the world. And now that it is exporting more than usual, domestic prices have spiralled. These days, palm oil is being compared to gold in the country.
The crisis is being felt globally, including in India, where vegetable oil is an essential household item. The biggest reason for sky-rocketing price of palm oil is the Russia-Ukraine war. Both countries are said to be the biggest producers of sunflower and soyabean oil and together produce 80 per cent of the global demand. But with supply stopped since the start of the war on February 24, the world has turned towards the closest substitute, i.e., palm oil. And this has increased the global demand for palm oil.
On the other hand, when Indonesian authorities tried to control prices of palm oil, it led to increased hoarding. The government had fixed the price of branded oil to 14,000 Indonesian rupiah and that of crude palm oil to 9,300 Indonesian rupiah. At the same time, one person was allowed to only 2 litres of palm oil at once and exporters were instructed to sell 30 per cent of the produce in the domestic market. But traders opposed the move, and thus began increased hoarding.
India has been adversely affected by increasing prices of palm oil, for it is one of the biggest importers of vegetable oil. India imports nearly 60 per cent of its edible oil, and palm oil comprises 60 per cent of this demand. The crisis in Indonesia has upped prices of edible oil in India by 20-25 per cent.
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 "Skyrocketing palm oil prices in Indonesia leave a bad taste globally")
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