Global edible oil markets simmer after shock Indonesia ban: report
Indonesia’s ban on palm oil exports shocked global markets for edible oils, which have already reached record high prices this year, and sparked alarm among major importers of the cooking medium.
Palm oil is the world’s most widely used vegetable oil and is used in the manufacture of many products, including biscuits, margarine, detergents and chocolate.
Below are details on the world’s most important edible oils:
PALM OIL
Palm oil is by far the most produced, consumed and traded edible oil in the world, accounting for about 40% of the supply of the top four most popular edible oils: palm oil, soybean oil, canola oil (canola) and sunflower seed oil.
About 77 million tons of palm oil is expected to be produced this year, according to the United States Department of Agriculture (USDA). Indonesia is the largest producer, exporter and consumer of palm oil, accounting for about 60% of the total supply. Malaysia is the second largest supplier with approximately 25% of the global supply.
India is the largest importer of palm oil, while China, Pakistan, Bangladesh, Egypt and Kenya are other major buyers.
According to the USDA, palm oil accounts for 40% of Indian food consumption of vegetable oil in a typical year. Import forecasts have fallen this year due to Indonesia’s restrictive trade policies, high edible oil prices and other factors.
Global palm oil production declined in 2020 and 2021 due to a decline in migrant workers on plantations in Southeast Asia, leading to reduced fruit bunch harvests and less fertilizer for trees.
Indonesian authorities previously restricted edible oil exports between late January and mid-March in an attempt to control domestic cooking oil prices.
SOJOIL
Soybean oil is the second most widely produced edible oil, with production expected to be around 59 million tons this year. China is by far the largest producer (15.95 million tons), followed by the United States (11.9 million tons), Brazil (9 million tons) and Argentina (7.9 million tons).
Prices rose to an all-time high amid concerns over Indonesia’s decision to effectively ban palm oil exports.
Argentina is the largest exporter of soybean oil, but expects to transport less oil this year after a poor end to the soybean growing season. The country briefly halted new overseas sales of soybean oil and meal in mid-March, before raising the export tax on soybean oil and meal from 31% to 33% in an effort to reduce domestic food inflation. According to the USDA, Brazil and the United States are the second largest exporters. More soybean crushers are expected to open in the United States in the coming years due to strong demand to use the oil in biofuel, but the capacity to increase demand in the near term is limited.
India is the largest importer of soybean oil.
RAPESEED OIL
About 29 million tons of canola oil is expected to be produced this year, mainly in Europe, Canada and China, according to the USDA. China and the United States are top importers.
In 2021, the drought left Canada’s crop of canola, a variety of rapeseed, and Europe also damaged crops, reducing oil supplies before 2022.
Canada exported about 75% of its canola oil used in food and fuel last year, with the United States taking 62% and 25% to China, according to the Canadian Oilseed Processors Association.
India, the largest importer of edible oil, has harvested a record crop of canola this year, popularly known as mustard in the country.
SUNFLOWER OIL
Russia and Ukraine account for 55% of global solar oil production and 76% of world exports. Since the Russian invasion of Ukraine in February, shipments from the region have fallen and this year’s production is expected to be disrupted in Ukraine.
Traditionally, China, India and Europe have been the main importers of solar oil, but buyers there are all busy finding alternative oils to replace lost supplies from the Black Sea.
More than 90% of India’s imported sunflower oil mostly comes from Ukraine and Russia.
Argentina is the world’s fifth largest exporter of sunflower oil, according to the USDA.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)
