KATHMANDU, May 2: Nepal’s export of processed palm oil along with the manufactured goods using this oil are likely to face a serious hit after Indonesia imposed a ban on the export of palm oil citing the ongoing shortage of edible oil triggered by the Russia-Ukraine war.
According to international media, Indonesia, since last Wednesday, imposed restrictions on the export of its palm oil. The price of palm oil has recently surged from US $ 1.03 per liter to $ 1.52 per liter in the Indonesian market.
Since the past few years, palm oil has been the main export item of Nepal, giving the country billions of rupees in its export earnings. Nepal exported palm oil worth Rs 33.61 billion to India during one month of mid-March and mid-April this year.
Prakash Mundada, former president of Morang Trade Association, said the disruption in the supply of palm oil will affect around two dozen factories in Birgunj and Biratnagar that have invested around Rs 50 billion in their production plants. According to him, the problem will affect production of biscuits, instant noodles, soaps and restaurant businesses. These industries utilize around 250,000 tons of palm oil annually.
Indonesia shares around 60 percent of the global supply of palm oil, followed by Malaysia with a 25 percent of global supply share. Currently, Malaysia is reported to have faced a shortage of laborers to produce palm oil in adequate amounts.
Due to the Russia-Ukraine war, apart from palm oil, the supply of other edible oils produced out of sunflower and soybean, among others, has been affected after the countries concerned restricted the export of oil seeds. Sunflower oil price increased by 73 percent to $ 2,844 per ton during September 2021 and March 2022 in the international market.
Argentina, the largest exporter of soybean oil, has halted exports of the oil since March to control domestic food inflation. With cumulative impacts, the price of soybean oil surged more than 50 percent in April.