Indonesia’s shock move to ban exports of cooking oil will reverberate across the world, threatening to push up costs for the likes of Nestle SA and Unilever PLC and heighten concerns about food inflation.
The world’s biggest shipper, Indonesia, will halt some cooking oil exports from April 28 after a domestic shortage led to street protests over high food costs. This will squeeze already tight supplies of vegetable oils and add to the impact of Russia’s invasion of Ukraine that’s thrown sunflower oil trade into chaos.
While details have emerged that Indonesia’s ban will exclude some products, it still risks stoking food inflation further. World food costs are at an all-time high and surging at the fastest pace ever. The ubiquitous use of edible oils in everything from candy to frying and fuel means that it could well be a thorn in the side of global food inflation for a long time to come.