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Indonesia's palm oil export ban heats up vegetable oil market
Vegetable oil prices have reached new highs, further tightening a market already on edge.
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Workers transfer harvested palm fruits to a transport truck before being processing into crude palm oil (CPO) at a palm plantation in Pekanbaru, Riau, on April 23, 2022. (AFP/Wahyudi)
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ndonesia's decision to suspend palm oil exports in the face of domestic shortages has pushed vegetable oil prices to new highs, further tightening a market already on edge due to the war in Ukraine and global warming.
The prices of palm, soybean, European rapeseed and even its Canadian GMO counterpart, canola oil, have reached historic highs following Indonesia's announcement on Wednesday.
"We already had problems with soybeans in South America, with canola in Canada," said Philippe Chalmin, an economics professor at Paris-Dauphine University in France, stating that both crops had been severely affected by extended droughts.
Then came devastation for the "sunflowers in Ukraine" due to Russia's destructive invasion, he added.
Palm oil is the most consumed vegetable oil in the world, and Indonesia accounts for 35 percent of global exports, according to James Fry, chairman of LMC consulting firm.
Indonesia's export ban is designed to bring down prices in the country and limit shortages, according to authorities.
But Chalmin said the move "comes at the worst time."
