‘Indonesia palm oil ban may affect Zim edible oil supplies’

06 May, 2022 - 00:05 0 Views
‘Indonesia palm oil ban may affect Zim edible oil supplies’

eBusiness Weekly

Business Writer

Zimbabwean cooking oil producers have warned of potential supply shortages after Indonesia, the world’s biggest palm oil exporter, imposed a ban on palm oil exports to avert potential domestic shortages due to ongoing Russia’s war in Ukraine.

Indonesia, which exports about a third of the world’s edible oil, imposed a sweeping ban on palm oil exports last week to protect its domestic market at a time of rampant global inflation.

Edible oils have been on a tear due to the war in Ukraine, which affected shipments of sunflower oil, worsening an existing shortage in part caused by droughts.

Zimbabwe’s oil expressors dominantly use soya bean oil.

There are growing fears that the ban on palm oil exports will result in more global oil expressors turning to soya bean oil as a substitute and this will exert more pressure on demand.

“The situation is looking bad,”  Sylvester Mangani, the chief executive of Surface Wilmar, the producer of Pure Drop cooking oil brand, said last week.

 “We are going to see huge demand for soya bean oil which local producers dominantly use with a potential of shortages.”

Mr Mangani noted that the demand had the potential to drive price increases.

An official with a leading cooking oil company said “we can expect more countries to ban exports and this may lead to shortages. A major price increase is Inevitable.”

Analysts say there was now need to start expanding domestic production of food crops to ensure food security.

The Russia-Ukraine war has resulted in a new wave of protectionism as governments seek to secure food and other commodities for their citizens.

According to reports, export restrictions are making grains, oils, meat and fertilisers — already at record prices, more expensive.

Since the beginning of the year, countries have imposed a total of 47 export curbs on food and fertilisers — with 43 of those put in place war broke out in Ukraine in late February, New York Times reported, citing Simon Evenett, a professor of international trade and economic development at the University of St. Gallen.

Price increases for food commodities—of which Russia and Ukraine are major producers—and fertilisers, which rely on natural gas as a production input, have been the highest since 2008.

Russia and Ukraine provide around 30 percent of the world’s wheat and barley, one-fifth of maize and over half of sunflower oil.

At the same time, Russia is the world’s top natural gas exporter and the second-largest oil exporter. Russia and its neighbor Belarus export around 20 percent of the world’s fertilizers.

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