yunhap newsConcerns are growing over food price hikes following Indonesia’s ban on the export of cooking oil.
According to Bloomberg News on the 25th (local time), the Indonesian Ministry of Agriculture and Forestry has designated RBD Palm Olein, a high value-added product, as an export prohibited item. “The export of palm oil crude oil will continue to be permitted,” he said.
RBD palm olein accounts for 30-40% of Indonesia’s total palm oil exports. Palm oil When crude oil is refined, bleached, and deodorized, it becomes RBD palm oil, and afterward, the process is corrected and separated into palm stearin, a solid part, and palm olein, a liquid part.
Contrary to concerns, the export of palm oil crude oil is not banned, but global food price hikes are inevitable.
An edible oil stand at a large supermarket in Seoul on the 25th. yunhap news
Indonesia is the largest exporter, accounting for one-third of the world’s edible oil exports, and if palm oil exports are suspended from the 28th, chaos in emerging markets such as Sri Lanka, Egypt and Tunisia is expected to increase. In developed countries, prices may soar.
India, the world’s largest importer of palm oil, soybean and sunflower oil, is facing massive inflation. Cooking oil prices in New Delhi have risen 12 to 17 percent since the outbreak of the Ukraine war in February. The government is exempting import taxes and cracking down on hoarding, but the price of cooking oil shows no sign of moving.
China is also a major importer of Indonesian cooking oil. Last year, 4.7 million tons of palm oil were imported from Southeast Asian countries, accounting for 70% of total imports. China’s purchasing power has plummeted this year due to the COVID-19 containment policy and high prices.
Farmers in Malaysia, the world’s second-largest palm oil exporter after Indonesia, are expected to see a significant increase in sales due to a rise in palm oil prices. Malaysia’s trade surplus is also expected to increase.
However, the problem is that Indonesia’s policy has to depend on price volatility. Palm oil futures prices rose by 7% at the beginning of the day, but turned to a downtrend as Indonesia’s export bans were specifically announced.
Meanwhile, in Indonesia, protests broke out as food prices rose due to a shortage of palm oil in the country, and eventually, it was decided to suspend palm oil exports.
This is because the price of sunflower seed oil soared due to the Russian invasion of Ukraine earlier, putting pressure on global supply. Ukraine accounts for 80% of global sunflower oil exports.
Palm oil is a raw material used not only for cooking oil but also for biofuels.
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