Edible oil industry asks government to engage with Indonesia on ban on edible oil exports
Kolkata:
Cooking oil’s national industry body – Solvent Extractors Association (SEA) has suggested to initiate talks with the government from April 28 on the proposed palm oil export ban with Indonesia as it will have an adverse impact in India.
Indonesia, which is the world’s largest producer of palm oil and meets about 50 per cent of the total palm oil requirement in India annually, has imposed restrictions on exports until further notice to control edible oil prices in its domestic market. Ban was announced.
“We have suggested that our government initiate talks with Indonesian counterparts at the highest diplomatic level on the cooking oil export ban. This will have serious implications for our domestic market as half of our total palm oil imports come from Indonesia and none It cannot be filled. This void,” SEA Director General BV Mehta said.
He said that the SEA is in touch with the Union Food Ministry.
“…the industry did not expect the ban. From Monday itself, there will be an immediate impact on the prices in the domestic market as the news of the ban has distorted the sentiment,” Mehta said.
The cooking oil industry was braced for the worst change in export tariffs by Indonesia, which has been battling a nearly 40-50 per cent increase in cooking oil prices in its domestic market.
Indonesia was levying an export duty of $575 per tonne.
“This news will further push up oil prices in Malaysia, which is our major alternative sourcing market,” Mehta said.
He said, “India consumes 22.5 million tonnes of edible oil annually, of which 9-9.95 million tonnes is met by domestic supplies and the rest from imports. About 35-40 lakh tonnes of palm oil is imported by India annually from Indonesia. is.”
With Ukraine at war, sunflower and soybean oil is already under pressure as imports have been halved but the situation was managed with other types of oil. But, the Indonesian oil embargo will have a “disastrous effect” unless resolved quickly, an edible oil refiner official said.
The previous Economic Survey of India had attributed rising oil and fat prices to a major driver of inflation in the food and beverages category in 2021-22. Despite the basket having a weight of only 7.8 per cent, oils and fats contributed about 60 per cent to food and beverage inflation in the country.
Inflation at both retail and wholesale levels for edible oil began in the March quarter of 2019-20 and is still continuing. After reading 13.11 per cent in February 2022, the Wholesale Price Index or WPI-based inflation rose to 14.55 per cent in March 2022.
Edible oils such as palm oil are a major raw material for the FMCG and HoReCa (Hotel, Restaurant and Caterers) industries and the rise in prices of these commodities affects consumer goods beyond food products such as soaps and shampoos.