New Delhi: It looks like consumers nationwide may have to put up with bigger holes in their pockets for some time now. Indonesia last week banned the export of palm oil from April 28. It must be said that it is the largest producer of palm oil in the world. But for consumers, this is concerning because palm oil is used to make a wide variety of products, including shampoos, soaps and noodles. It comes as India battles months-long high inflation, driven by high food and fuel prices.Also Read – #RasodeMeinMardHai- Pankaj Tripathi and Bail Kolhu’s initiative aims to equalize gender roles in the kitchen
According to a report by News18, the island nation has banned the export of palm oil as supply has dwindled and prices have soared, especially in the Southeast Asian region. The rising price of palm oil, which is a major component in the production of detergents and cosmetics, will drive up input costs. Read also – Monday Blues: Sensex closes more than 1,000 points lower, Nifty just over 17,200
The report also states that India imports almost 80 lakh tons of palm oil from all over the world. The impact of this decision is already visible on FMCG values. On Monday, Nifty FMCG was one of the worst performers of all indices. It fell nearly 2%, with Godrej Consumer Products, Marico and ITC being the main losers. Nestlé, Dabur, Britannia, Hindustan Unilever, all major FMCG stocks were in the red. Also Read – Surf Excel, Rin, Lifebuoy will now cost more as Hindustan Unilever hikes product prices | Check price details here
According to Reuters, a rise in palm oil prices will further increase the prices of other edible oils like soybean oil, sunflower oil and rapeseed oil. Analyst Jefferies also said it would increase pressure on companies like HUL, GCPL, Britannia and Nestlé.
What is likely to be expensive in India?
- Cosmetic products
In addition to concerns in Indonesia, Malaysia, which is the second largest producer of palm oil, is also experiencing a production shortfall due to a labor shortage. The Covid-19 pandemic has further increased the difficulties of the industry. With the first 2 producers in deep waters, the pressure will finally fall on consumers.