New Delhi:Indonesia’s decision to lift a ban on the export of crude palm oil from Monday has come as a big relief for the world market which was reeling under supply crisis of edible oils. However, it is particularly beneficial for a country like India which is the world’s largest importer of palm oil and Indonesia’s decision to ban the export of palm oil from April 28 this year has put half of India’s palm oil supplies under cloud.
Indonesia’s the world’s largest producer and exporter of crude palm oil which is the staple cooking oil in several countries including India and the Indonesian ban has sparked the fears of supply shocks and consequent price rise as edible oil prices are at a high globally following the start of Russia-Ukraine war in February this year. As the war disrupted the supply of another important edible oil, the sunflower oil, sourced from Ukraine. India imports 1 to 1.1 million tons of edible oils per month with annual imports in the range of 13-14 million tons. Palm oil imports account for more than 60% of India’s edible oil imports.
Indonesia accounts for half of India's edible oil supplies
On a monthly basis, Indonesia’s move removed nearly 2 million tons of palm oil supplies from the global market, which is half of the monthly global trade. Indonesia’s decision, did not even last for a month as the local farmers protested the ban and Indonesia’s storage capacity reached the saturation level in less than a month. However, this more than 3-week long ban on the export of crude palm oil caused serious concerns in India as it put pressure on edible oil prices in the retail market which has already been on an elevated level for more than two years.
The problem was aggravated as sunflower oil supplies from Ukraine were already hit.