SINGAPORE/JAKARTA - A move by top palm oil exporter Indonesia to restrict shipments and boost domestic biodiesel consumption is set to squeeze global vegetable oil supplies already undercut by lower output in South-east Asia and Latin America.
Edible oil buyers, including price-sensitive consumers in South Asia and Africa, will bear the brunt of the supply-side constraints.
They come just as demand is forecast to climb, with China easing Covid-19 controls and India boosting purchases.
Indonesia's export restrictions and higher use of crops for making biofuels are another challenge to food-importing countries hurting from last year's red-hot inflation, which pushed prices of key staples such as wheat, corn and soybeans to all-time or multi-year highs.
"The implementation of (the) B35 mandate in Indonesia in 2023 definitely changes (the) global palm oil SND (supply and demand) situation in 2023," said Mr Oscar Tjakra, a senior analyst at food and agribusiness research at Rabobank.
"I'm now expecting global palm oil SND will be in a slight deficit."
This story is from the January 14, 2023 edition of The Straits Times.
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This story is from the January 14, 2023 edition of The Straits Times.
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