*India in a spot as Indonesia bans edible oil exports – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/todays-paper/india-in-a-spot-as-indonesia-bans-edible-oil-exports/article65346453.ece

Country imports as much as half its requirement of8.3 mt palm oilfrom Indonesia

There appears to be no respite for Indian consumers on the edible oil front. Consumers should brace themselves for difficult times ahead, as Indonesia — India’s main source of palm oil imports — banned exports of all edible oil raw materials on Friday to ease domestic shortage.

Indonesian President Joko Widodo announced on Friday the suspension of all cooking oil and raw material exports from April 28 until further orders. The decision comes in the midst of a severe shortage and skyrocketing prices of edible oils in the South-East Asian nation.

This is expected to flare up prices in the Indian edible oil market, which is already reeling under inflation amid post-Covid consumption push coupled with the Ramadan period and marriage season.

Oil imports to India

“This uncalled-for action (by Indonesia) will have massive implications for India. Local prices in Indonesia may fall as a result of this decision, but prices in India may skyrocket. It is going to be a difficult time,” Atul Chaturvedi, President, Solvent Extractors’ Association of India (SEA), told Businessline .

India imports about 8.3 million tonnes of palm oil, including crude palm oil (CPO), palmolein and PFAD (Palm Fatty Acid Distillate), of which nearly half (4 million tonnes) comes from Indonesia. Malaysia is the second largest source of palm oil (3.8 million tonnes), with Thailand accounting for the remaining half-a-million.

Edible oil prices have been on the rise due to disruptions in sunflower oil since the outbreak of the Ukraine-Russia war. The latest development from Indonesia is feared to impact prices. CPO prices are already up by 15 per cent from $1,594 per tonne (CIF Indian port) to $1,828 since February 2022. This has had an effect on non-palm oils, such as crude sunflower oil, which has increased by 41 per cent from $1,506 to $2,125 in the past one month.

However, Sudhakar Rao Desai, President of the Indian Vegetable Oil Producers’ Association (IVPA), raised doubts about the sustainability of the Indonesian decision as the country may find it difficult to handle huge quantities of palm oil it produces.

Edible oil expert, Govindbhai G Patel from Rajkot, maintained that to ease the possible supply shortage and control the price rise situation, diplomatic intervention apart from removal of the 5 per cent import duty on edible oils may be needed.