Indonesia Tightens Palm Oil Export Curbs In New Hit To Global Supplies.

Why in news?

• Indonesia, world’s largest producer and exporter of palm oil is facing domestic shortages, leading to price controls and export curbs.
• Reasons of palm oil crisis in Indonesia
  • Supply disruptions — manmade and natural — in other cooking oils, especially sunflower and soyabean.
  • Soyabean oil is facing supply issues due to dry weather in South America.
  • Use of palm oil as a bio-fuel. Since 2020, Indonesia made 30% blending of diesel with palm oil mandatory as part of a plan to slash fossil fuel imports.
• India is world’s biggest vegetable oils importer. Out of its annual imports of 14-15 mt, the share of palm oil is 8-9 mt.
  • Indonesia has been India’s top supplier of palm oil, however, now it will get lower supplies from Indonesia.
  • This may result in higher imports from Malaysia for Palm oil.
• 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.
  • Globally, palm oil supplies 40% of the world’s vegetable oil demand on just under 6% of land used to produce all vegetable oils.
  • Palm oil has been a major driver of deforestation of the world’s most biodiverse forests.