Inflation in India to skyrocket due to an Indonesian decision; These items will become more expensive!

New Delhi: Indonesia, the world’s largest producer of palm oil, on Monday shocked everyone by banning palm oil exports. The ban will take effect on April 28. (Inflation in India)

The ongoing war between Russia and Ukraine has affected the availability of sunflower oil. With Indonesia announcing a sudden cut in palm oil supplies, fears of rising food and cosmetic prices are being raised at all levels.

While announcing the decision to ban palm oil exports, Indonesia has gone beyond that by banning the export of all types of edible oils. Indonesia has announced that it is taking this decision to tackle the country’s edible oil shortage. As a result, palm oil futures rose 7% on Monday. At the same time, palm oil futures in Indonesia have plummeted. We are most dependent on Malaysia for palm oil after Indonesia.

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The interest of agricultural protection

Indonesia is the world’s third largest exporter of edible oil. Experts are criticizing the government’s decision to cut palm oil exports as a form of self-interest by protecting its own agricultural products. The war between Russia and Ukraine has forced each country to protect its own food supply. That is why this type is considered.

Impact on India

– The margins of consumer goods and food manufacturing companies will decrease

– Bread, biscuits, chocolate, soap, cosmetics will be more expensive

– In case of scarcity of palm oil, prices of soybean and sunflower oil will go up

– If palm oil becomes available at higher prices, the revenue of FMCG companies will decline in the first quarter of the current financial year.

– Prices of edible oils will rise, causing the monthly budget of the common man to collapse

The following companies may be affected –

Burger King India, Nestle India, Hindustan Unilever, Britannia, Godrej Consumer, ITC, Dabur

(Source: Morne Stanley, Jefferies, Bloomberg)

What are the reasons behind export ban?

Indonesia is currently experiencing a severe shortage of edible oil. The supply of edible oils should be streamlined, so people are taking to the streets to protest against the government. Controlling food prices is a major challenge facing Indonesian President Joko Widodo. Indonesia’s Ministry of Industry has said that the national demand for smooth supply of edible oil is a national demand as Ramadan Eid approaches. The decision to ban palm oil exports has forced the Indonesian government to ban edible oil from retail outlets, skyrocketing palm oil prices and festive days.