Imports of palm oil from indonesia will be banned from april 28, reducing the amount of cooking oil imported to India. Due to this, prices are expected to increase. india imports about 45% of its total demand per year from Indonesia. So prices in india are expected to peak sharply due to the Indonesian embargo. Sunflower oil prices have already peaked amid the Russia-Ukraine crisis. In the meantime, if the current price of palm oil also rises, it could have a severe impact on the middle class.
What is the reason? According to media reports, the price of palm oil has skyrocketed domestically amidst the unrest in the country and exports have been banned to curb inflation. It is hoped that this will be used to bring prices under control and that the country may issue such an order.
India imports about 13-13.5 million tonnes of cooking oil annually. About 63% or 8.5.5 million tonnes of palm oil is imported. Of this 8 - 8.5 million tonnes, 45% is imported from indonesia alone. Most of the remaining oil imports also come from Malaysia. It has also been reported that the supply of palm oil from indonesia may be reduced to 3,00,000 - 3,25,000 tonnes per month from May. According to reports, even if imports are reduced, prices could reach a sharp peak. At a time when imports of sunflower oil are already stagnant, prices are expected to rise sharply if this also falls.
Imports of sunflower oil in india have declined from 2,00,000 to 2,50,000 tonnes per month to 100,000 tonnes after the Russia-Ukraine crisis. Thus the price has risen sharply. PV Mehta, president of the Solvent Extractors Association of india, warned that if indonesia made such a decision, it would cause serious problems.
As of 2021, malaysia is the next largest importer after indonesia, Thailand, singapore and Nepal. malaysia and indonesia are the top importers.
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