Jakarta, CNBC Indonesia – Australia began to hit the vegetable oil crisis. This is starting to complain about business actors in the country.
Collect ABC News, one of which is Teresa Paolini. The food shop entrepreneur in Melbourne used to be able to buy a cottonseed oil blend for frying for less than AU$40 per drum, but not anymore.
“Now the price is up to AU$60 (Rp. 621 thousand). We have to increase the price by about 50 cents for each item,” said Paolini quoted Tuesday (9/8/2022).
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The latest consumer price index (CPI) data does show how vegetable oil rose by 14% compared to last year. The increase is the same as fruit and vegetables.
According to analysts, the vegetable oil crisis is likely to hit many other parts of the food chain. This is because the goods have become the basic staples.
Vegetable oils are in everything from margarine to hummus. Including baked goods.
The rise in vegetable oils has also affected other industries. Such as cosmetics, lipsticks and moisturizers.
The latest CPI data shows personal care items are up nearly 5% in a year. One company that develops and manufactures cosmetics predicts that inflation will increase to 15% by 2023, due to vegetable oil prices.
What is driving the increase?
Just like petroleum and gas, vegetable oil is a globally traded commodity that follows international prices. Prices are also affected by the Russian war in Ukraine.
Both Russia and Russia are some of the largest sunflower oil producers. The war has kept their exports largely restricted.
“The prices of (vegetable oil) have actually risen really fast this year as a result of the invasion,” said Rabobank senior commodities analyst Cheryl Kalisch Gordon.
However, sunflower oil is not the only one experiencing price increases. This also happens to others, such as canola, oil palm, soybean, to cottonseed.
“Before that, we’ve seen prices that are double the five-year average,” said Ms Kalisch Gordon.
In particular for palm oil, for example, the lack of labor in Malaysia and Indonesia, the two largest exporting countries, is also another problem of price-boring. Not to mention the export ban that had been in effect to ensure domestic sufficiency.
Specifically for soybean oil, disappointing harvests in Brazil and Paraguay are also a problem. Soybeans are also getting extra demand from China, which is buying beans to rebuild its pig herd after an outbreak of African swine fever.
“Really, we’ve come across a series of issues put into this that aren’t normally expected,” Gordon added.
“Higher prices for soybean, palm oil and canola have led to higher prices or costs across the whole complex, including for olive oil and cottonseed.”
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