Palm oil - food versus fuel, +civil unrest

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Indonesian palm oil export ban could ‘lead to unrest’ as food inflation hits Asia, Africa
The ban comes at a time when the exports of all other major oils are globally under pressure, including sunflower oil amid Russia’s invasion of Ukraine
As cooking oil prices soar and consumer power declines, one analyst warns of a heightened risk of ‘social unrest and pressures for political change’, as seen in Sri Lanka
Amy Chew Published: 6:30pm, 25 Apr, 2022
https://www.scmp.com/week-asia/economic ... -inflation
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Unless governments choose to release oils from biofuel uses, such as by suspending or deducing mandates, to allow oils to go to food users, prices will go higher, the longer the Indonesian action continues, Fry said.
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and,
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Malaysia’s palm oil board on Monday said it was time for countries to reconsider their food versus fuel priorities, as Indonesia’s decision to ban palm oil exports had ignited a “crisis” of global edible oil shortage.
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See also:

Indonesia's Indrawati says palm oil export ban will hurt other countries, but necessary
https://www.reuters.com/business/energy ... 022-04-22/

Indonesia's palm oil export ban leaves global buyers with no plan B
https://www.reuters.com/business/indone ... 022-04-25/

Crude palm oil excluded from Indonesia export ban
https://www.reuters.com/world/asia-paci ... 022-04-25/

Also: Indonesia Palm Oil Export Ban Drives Up Vegetable Oil Prices
22 April 2022
https://gro-intelligence.com/insights/i ... oil-prices
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Indonesia’s announcement that it plans to ban exports of palm oil drove prices higher for a range of vegetable oils. May soybean oil futures jumped as much as 4% in volatile intraday trading Friday to their highest level on record.

The export ban is scheduled to take effect on April 28 and continue until further notice. Indonesia said the move is aimed at controlling rising domestic prices for palm-based cooking oil. The country is the world’s biggest producer and exporter of palm oil, the most popular type of vegetable oil.

Global inventories of several types of vegetable oils already are at some of their tightest levels in years, which has pushed prices steadily upward. The Russia-Ukraine war has driven further price gains as Black Sea sunflower oil exports are halted by the conflict. Edible oils are often interchangeable, so a shortage of one type exerts pressure on the others.

Increasingly, vegetable oils also are used as a replacement for fossil fuels, a usage that is forecast to grow rapidly as companies expand biofuel production capacity, especially in the US. In the past decade, biofuel production accounted for nearly 30% of the average annual increase in global vegetable oil consumption.
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Also:
Palm Oil Price Surge Drives Global Food Inflation to 10-Year High
13 October 2021
https://gro-intelligence.com/insights/p ... -inflation
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Edible oil prices continue to surge, helping drive global food inflation to a 10-year peak. Seasonal high demand from major importing countries, and constrained supply by key producers, are propping up prices for palm, soy, and other edible oils.
In the US, Gro’s US Food Price Index is at its second-highest level since the start of the coronavirus pandemic in spring 2020, sending a worrying signal on high food inflation.

Edible oils are a key ingredient used by nearly all consumer packaged goods companies in products ranging from Apple Pop Tarts to Abe’s Zucchini Bread. Continued elevated prices for edible oils are likely to force companies to pass on the higher costs to consumers or swallow the diminished profit margins.

China and India are the biggest importers of edible oils, with domestic demand typically spiking this time of year for seasonal holiday festivals. That has helped palm oil futures to more than double in the past five months on the Dalian Commodity Exchange, and to reach their highest level in over 10 years. Palm oil prices also have rallied along with crude oil, because of its use in biodiesel.

Palm is the most widely consumed edible oil, followed by soybean oil. Surging edible oil prices helped push world food prices to their highest level in 10 years, the UN’s FAO said.

Edible oils also are experiencing supply constraints. In India, wet weather has hampered harvesting of the soybean crop, especially in the key producing state of Maharashtra.

In China, power supply issues stemming from higher coal costs as well as emissions concerns have shuttered soybean crushing plants, cutting domestic soybean oil supplies. That has pushed up soybean oil futures prices and driven greater substitution demand to palm oil.

Meanwhile, palm oil production is down sharply in Malaysia, the second-largest producer, with monthly production so far this year running close to the bottom of the historical range, resulting mainly from ongoing labor shortages due to COVID-19 protocols. Top producer Indonesia also has seen lower production due to heavy summer rains and flooding.

Supplies of canola oil, the No. 3 edible oil, also have taken a hit as leading producer Canada heads to the smallest crop since 2010 due to drought.

With pressures from both high demand and tight supplies, global edible oil prices can be expected to remain elevated for the foreseeable future and will continue to drive food inflationary concerns.
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