We have products that can take us to 3 months, Frytol
Ban on palm oil export to affect prices
Crude palm oil importers have expressed their fears over the possible shortage of palm oil if Indonesia’s ban on crude oil imports lingers.
Managing Director of Wilmar Africa Limited, producers of Frytol, Kwame Wiafe, has however noted that suppliers currently have stock to last for about 3 months after which the market will run out if the ban is still in force.
Speaking to Citi Business News he said, “So, because we normally import, there is a 3-month cycle in terms of product availability. Currently, we may have products either on the sea or on the ground that can take us to 3 months, but if the ban is sustained and we are unable to bring in more products from now onwards then after 2 to 3 months the supply-side risks will start to kick in.”
“On the pricing front though, it will start translating within the shortest possible time because of the fact that our prices are tied to prices on the international market,” he added.
The world’s biggest producer of crude palm oil Indonesia has placed a ban on the export of the commodity from April 28 after it experienced a shortage of cooking oil in its country.
The Indonesian government however acknowledged the fact that even though the palm oil export ban will hurt international consumers it has become necessary that prices are lowered for domestic, branded cooking oil, which soared from 14,000 to 15,000 rupiah (US$0.96 to US$1.03) per liter to over 22,000 rupiahs (US$1.52) per liter.
Indonesian President Joko Widodo in a statement on April 27 said the ban would be lifted once local demand was met and prices stabilized.
Palm oil is by far the most consumed and traded edible oil in the world.
Palm oil ban to affect prices