Chandigarh Indonesia, the world’s largest palm oil producer and exporter, is facing a huge shortage in its own country this time. The crisis is believed to be man-made, with the Russo-Ukrainian War playing a major role. Prioritizing its domestic needs, Indonesia has taken several steps in this regard, including measures to control exports. Let us know how the palm oil crisis that started from Indonesia has affected India.
Palm oil shortage in Indonesia
It is strange to hear rumors about palm oil in Indonesia. But Indonesia, the world’s largest palm oil producer and exporter, is currently facing severe shortages. The situation is that the government has not only taken steps to control its prices but has also controlled exports. This was about 60% of its world production. Malaysia is the second largest producer after this, but only 18.70 million tonnes were produced. Indonesia is the largest exporter with 29 million tonnes, followed by Malaysia at 162.22 million tonnes.
Indonesian government took the lead
The situation of palm oil crisis in Indonesia is such that in March last year, in mid-March this year, the price of branded cooking oil increased from about 14,000 Indonesian rupees per liter to 22,000 Indonesian rupees per liter. Realizing the crisis, the Indonesian government imposed a cap on its retail prices on 1 February. INR 14,000 for premium oil and INR 13,500 for normal. Palm oil disappeared from the market as a result of the austerity measures of the government. Amidst the news of hoarding, people lined up to buy it. The domestic shortage was so great that the government decided for its exporters that 20 per cent of the items they wanted to export would be sold in the domestic market. Which has been increased to 30 percent from 10 March. So the prices have also been fixed. There is no longer palm oil to meet export or domestic needs. The Indonesian government on March 16-17 this year lifted a ban on selling at domestic prices and sending 30% of stock abroad. But with it came a progressive tax on exports.
palm oil India of crisis Feather what has been the effect ,
India is the world’s largest importer of vegetable oil. Palm oil contributes 80-90 million tonnes annually to 14-15 million tonnes of edible oil imports. After this it imports 30-35 lakh tonnes of soybean and 2.5 million tonnes of sunflower oil. Indonesia has been India’s largest exporter of palm oil. However, Malaysia overtook it in 2021-22. Inflation figures show that edible oil prices in India have increased by 20 to 25%, especially due to the palm oil crisis in Indonesia. To curb this, the government has reduced the import duty on it from 19.25 percent to 13.75 percent. Alternatively, the import of soybean and sunflower oil has also increased. However, in the changed circumstances, it will have to pay Rs 1.63 lakh per tonne as against Rs 1.23 lakh per tonne earlier. That is the global edible oil crisis. Has had a big impact. But the way the decisions have been taken to reduce customs duty and increase oil imports, it shows that the government is keeping an eye on the crisis.