“Already sunflower oil supplies were hit due to the war in Ukraine. Now if palm oil supply is disrupted then prices will skyrocket. Prices were already high and Indonesia’s decision will add to the pressure and hurt supplies,” said BV Mehta, executive director of the Solvent Extractors Association, a trade body.
“I don’t want to create any panic but it is a big jolt suddenly and will have implications,” said Mehta. He said the Centre should now start talks with the Indonesian government to help resolve the crisis and urge them to begin exports. Soaring domestic prices and shortage of palm oil domestically has prompted the Indonesian authorities to clamp down on exports.
Mehta said of the total monthly consumption of all edible oils of 18 lakh tonnes, nearly 6-7 lakh tonnes of palm oil comes from Indonesia. The rest of palm oil is sourced from Malaysia, Thailand and Papua New Guinea.
Edible oil prices had hardened domestically and were a contributor to the stubborn price pressures. The government has taken some steps to moderate prices but they have remained stubborn adding to pressure on household budgets.
Russia’s invasion of Ukraine disrupted supply of sunflower oil which is also used widely as a cooking medium.