India is confused after Indonesia stops exporting cooking oil and the Ukraine war

NEW DELHI, KOMPAS.com – Indonesia as a producer Palm oil The world’s largest producer has stopped export taps to stabilize prices at home, which have been rising due to the war in Ukraine and the Covid-19 pandemic.

Cooking oil is an integral part of food consumption in India. The country is the world’s second largest consumer and largest importer cooking oil. Around 56 percent of cooking oil needs are imported from more than seven countries.

Indians mostly use cooking oil from palm, soybean and sunflower.

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For palm oil itself, India imports 90 percent of its needs from Indonesia and Malaysia. About half of them come from Indonesia alone.

Meanwhile, half of the demand for sunflower cooking oil comes from Russia and Ukraine, which comprise 80 percent of global exports.

The war in Ukraine will reduce 25 percent of the supply of sunflower cooking oil in the next fiscal year, according to one report. Palm oil reserves in Malaysia, the world’s second largest producer, are also tight.

This year, India will spend about 20 billion US dollars on imports of cooking oil, double compared to two years ago.

“No country is so dependent on imports. We are very bloody right now. This is a big crisis. We need to learn from this crisis to reduce our dependence on imports,” said BV Mehta, director of the Solvent Extractors Association, a cooking oil trade association.

India reduces cooking oil tariffs to dampen prices. However, soaring prices since 2020 and supply disruptions due to the war in Ukraine have exacerbated the situation.

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The increase in global palm oil prices has reached 300 percent in the last two years, the preferred type of oil for households, hotels, restaurants and the bakery industry in India.

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