On Wednesday, a global food crisis precipitated by Russia’s invasion of Ukraine worsened as Indonesia tightened export restrictions on palm oil, joining a growing list of key producing countries aiming to keep essential food supplies within their borders.
The conflict in Ukraine has put global grain output, edible oil supplies, and fertiliser exports in jeopardy, driving basic commodity prices soaring.
Palm oil is the most frequently used vegetable oil in the world, and it is used to make a variety of items such as biscuits, margarine, laundry detergents, and chocolate. This year, palm oil prices have increased by more than 50 percent.
The export restrictions, according to Indonesia’s Trade Minister Muhammad Lufti, are intended to keep cooking oil costs in the country affordable for consumers.
The increase in pricing comes at a time when food affordability is a key issue as nations recover from the pandemic, and it is also contributing to a global spike in inflation.
Russia and Ukraine are also significant producers of edible oils, accounting for roughly 30 percent of global wheat exports.
Ukraine stated on Wednesday that it would ban a wide range of agricultural exports until the end of the year, including barley, sugar, and meat.
The violence has not only hindered exports from the Black Sea region, but it is also jeopardising harvest hopes as fertiliser prices rise and supplies dwindle due to a steep increase in the cost of natural gas, a major component in many products’ manufacturing process.
According to the United Nations Food and Agriculture Organization, world food prices reached a new high in February, rising 20.7 percent year on year, while many markets have continued to rise this month.
Following Indonesia’s statement, Malaysian palm oil futures hit an all-time high, while soybean oil prices hit a 14-year high.
Soybean oil prices have increased by over 40 percent this year.
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