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03 May 2022 Indonesia bans palm oil exports

Posted at 14:38h in Daily current-affairs by khyati khare 0 Comments

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Recently Indonesia, which is the world’s largest palm oil producer, exporter and consumer country, has announced that it will reduce the domestic shortage of cooking oil and its rising prices for the commodity and its products. Ban on all exports of raw materials.
India imports half of its annual palm oil requirement, ie 8.3 million tonnes, from Indonesia. Thus, the export ban imposed by Indonesia will affect the interests of India.

Palm oil is an edible vegetable oil obtained from the mesocarp (red pulp) of the Fruit of the Oil Palms.
It is used in everything from cooking, cosmetics, processed foods, cakes, chocolate, spreads, soap, shampoo and cleaning products to biofuels.
The use of crude palm oil to make biodiesel has been termed as ‘Green Diesel’.
Indonesia and Malaysia together produce about 90% of the global palm oil, with Indonesia also having a large share which produced 45 million tonnes of palm oil in the year 2021. The Hindu Analysis
The palm oil industry has come under criticism because of its continued production leading to increased deforestation, as well as to colonial-era conditions due to exploitative labor methods.
Although palm oil is also preferred because it is cheap; Palm oil has a higher production per hectare than some other vegetable oil plants such as soybeans.

According to the United States Department of Agriculture (USDA), with global production of palm oil exceeding 73 million tonnes (MT) in 2020, it is the most widely used vegetable oil in the world.
Its production is estimated to be 77 MT in the current financial year 2022-23.
According to Reuters, palm oil accounts for 40% of the global supply of the four most widely used edible oils (palm, soybean, rapeseed (canola) and sunflower oil).
Globally 60% of palm oil is supplied by Indonesia.

India is the largest importer of palm oil. Palm oil prices have risen this year due to increased demand due to short supply of alternative vegetable oils.
Soybean, which is the second largest producer of oil, is also likely to be affected this year as the weather is not favorable for soybean production in Argentina, its major producer.
Canola oil production was affected by drought in Canada last year, and supplies of sunflower oil, which is 80-90% produced by Russia and Ukraine, have been hit hard by the ongoing conflict.
Global food oil prices have risen sharply since late last year due to pandemic-induced labor shortages and global food inflation linked to the pandemic and the Ukraine crisis.

India is the largest importer of palm oil, accounting for 40% of its vegetable oil consumption.
India imports half of its annual requirement (8.3 metric tonnes) of palm oil from Indonesia.
This will increase the number of people who are already battling record-high wholesale inflation.
It is significant that last year the Center launched the National Mission on Edible Oil – Palm Oil to boost India’s domestic palm oil production.