Edible oil prices in India set to fall as Indonesia lifts palm oil export ban
Indonesia meets about half of India’s palm oil needs, which uses it to blend with other oils
Under the pressure of rising food inflation in the domestic market, India is breathing a sigh of relief as Indonesia, the world’s largest supplier of palm oil, announced it would lift a ban on export from Monday, May 23.
Russia and Ukraine are the world’s main suppliers of sunflower oil. Since the start of the war, sunflower oil prices have risen exponentially, affecting Indian markets as well.
Palm oil, which is relatively cheaper, is used in a mixture with other oils. Indonesia (meets India’s palm oil needs by 45%) and Malaysia (55%) are the main suppliers of palm oil to India, which buys 13 to 13.5 million tons of edible oils per year, of which about 8 million tons (about 63%) are palm oil.
Indonesia, like many other countries, has resorted to protectionist policies by banning exports and controlling prices in its own markets. Indonesian President Joko Widodo said his government had taken the decision to revive exports mainly for the benefit of 1.7 crore people associated with the palm oil industry.
“The average price of cooking oil (in bulk) before the export ban in April was Rs 19,800 per liter and after the ban the average price fell to around Rs 17,200-17,600 per litre. litre,” the president said in a video message broadcast on Indonesian state television. .
Also listen: Podcast: Why Indonesia’s palm oil export ban won’t last long
Indonesia imposed a ban on palm oil exports on April 28, which was seen as one of the most significant protectionist measures since Russia invaded Ukraine on February 24. This decision has only added fire to soaring oil prices across the world. The decision to rescind the export ban is likely to ease international edible oil prices.
Inventory in stock
Indonesia has the capacity to store around 6 million tons of palm oil. By early May, it had stockpiled 5.8 million tonnes. At the end of March, domestic stocks reached 5.68 million tons, against 5.05 million tons a month earlier, according to data from the Indonesian Palm Oil Association (GAPKI).
Indonesia only uses around 35% of its annual palm oil production at home, mostly for food and fuel.
Palm oil producers in Indonesia launched protests in Jakarta and elsewhere, pressuring the government to restart exports when prices for palm oil fruits fell dramatically.
Palm oil is a multi-purpose oil used in everything from food to soap and fuel.