INDONESIA BANS PALM OIL EXPORTS.

Why in news?

• Move comes in the backdrop of Indonesia, world’s largest producer and exporter of palm oil, facing domestic shortages which is leading to price controls and export curbs.
• Palm oil is an edible vegetable oil, comes from the fruit of oil palm trees. It is an efficient crop, producing more oil per land area than any other equivalent vegetable oil crop.

Reasons behind palm oil crisis in Indonesia

• Domestic shortage, amid rising demand and weak output from top producers Indonesia and Malaysia.
• Mandatory blending of palm oil in diesel.
• Supply side disruptions in other cooking oils
  • Sunflower oil – owing to Russia Ukraine war as both the countries account for nearly 80% of the global trade in sunflower oil.
  • Soyabean oil – owing to supply issues due to dry weather in South America.

Impact on India

• Food Inflation as Indonesia has been India’s top supplier of palm oil.
• Edible oils such as palm oil are a key raw material for FMCG and a rise in the prices of these commodities impacts consumer goods beyond food products such as soaps, shampoos, etc.

Steps taken by government for promoting Oil Palm

• National Mission on Edible Oils – Oil Palm (NMEO-OP) under which Mini Mission – II (MM – II) was dedicated to oil palm area expansion and productivity increases.
• Centrally Sponsored Oil Palm Development Scheme.