THEIndonesia has decided to block palm oil exports and the news sent the prices of all vegetable oils skyrocketing to all-time highs. The Southeast Asian country is in fact the world's leading producer of palm oil and is responsible for 50% of supplies on the global market. The ban - announced last Friday by President Joko Widodo to counter the shortage of cooking oil on the domestic market - will become effective from April 28 and will remain in force until the problem is resolved, the authorities of the Asian country specified.
The Indonesian move is likely to to drive up costs for the entire agri-food industry on the planet, but not only that, as palm oil is used in a wide range of products, from packaged foods to cosmetics. Pama oil futures for July delivery edged up 6,3% on Monday on the Kuala Lumpur market, to 6.754 ringgit a ton.
Palm oil and vegetable oils: the market was already tense
The backlash will also be felt in countries which, like Italy, import limited quantities of palm oil. In fact, the blockade comes at a particularly delicate moment, with inflation running and the war in Ukraine that he had a major impact on supplies of all vegetable oils. Not only that: stocks are already low worldwide due to the Maltempo which this year has affected several areas where palm oil and other vegetable oils are produced. Jakarta has therefore accentuated the tension in an already difficult context.
Comment from industry experts
According to Ivano Vacondio, president of Federalimentare, the ban on palm oil exports from Indonesia "strikes us because it is yet another sovereignty, after Hungary and Serbia, which joins the stop by Russia and Ukraine".
According to Luigi Scordamaglio, number one of Filiera Italia, Indonesia's decision will cause the prices of all vegetable oils to soar "even more".
Mauro Fontana, president of the Italian Union for Sustainable Palm Oil, underlines instead that Jakarta's move "damages us at a time when the consumption of the Italian industry is recovering".
