New Delhi: ‘Acche Din’ seems to be slipping further away from a large segment of the Indian society. Even as the intense debate over VAT reduction of fuel prices by states continue, another dent in the pocket is awaiting the consumers. The price of palm oil is set to skyrocket with Indonesia stopping exports from Thursday onwards. India is the largest importer of palm oil and needs 7,00,000 tonne every month. Half of it comes from Indonesia only. Now with that supply cut, Indian companies will have to outsource the oil from somewhere else which means an increase in costs that will ultimately boil down to consumers.
Palm oil officials were quoted as saying by ‘Reuters’ that the ban on exports of palm oil has trapped at least 290,000 tonne of the edible oil meant to be headed to India.
According to the officials, the disruption in shipments after Indonesia widened its export ban to include crude and refined palm oil will create a vegetable oil shortage in India. They also said that Malaysia, which is the second-biggest exporter, is already struggling to meet higher demand levels.
“Our vessel with 16,000 tonne of palm oil is stuck at Kumai port in Indonesia,” ‘Reuters’ quoted a top official of a company that buys 30,000 tonne of palm oil in India. “It means that there will be a shortage in the market and consumers will be hit hard.”
With limited options left now, Indian palm oil companies are now rushing to buy the staff from Malaysia. However, they have run into a dead end as the Malaysian companies have their own commitments and cannot go back on those to supply palm oil to India. So there will not be any respite for the pockets of consumers who are already feeling the pinch due to the astronomical rise in prices of petrol, diesel, LPG and piped gases.
Reports also said that Indonesia’s palm oil industry association GAPKI is working with the government so that the restriction is lifted. However, at present no immediate solution is in sight.
As it is, edible oil prices have been under pressure for the last couple of months due to the ongoing Russia-Ukraine war. Both the countries are major exporters of sunflower oil. Now with the Indonesian ban coming into effect, the prices of edible oils is expected to rise by a minimum 15 per cent which will definitely increase the heat on household budgets.
It should be stated here that palm oil is by far the most produced, consumed and traded edible oil in the world. India incidentally is one of the largest importers of both palm and sunflower oil.
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