By Varney Kamara|Daylight
Indonesia has banned palm oil exports, a move that will hurt Liberia, which imports the commodity and some of its products from that Asian country.
The ban comes amidst the Russian-Ukrainian War, which has cut off supplies of wheat and other agricultural products from the two warring countries to Liberia and other places around the world.
Indonesia imposed the ban on Friday following a series of demonstrations over soaring food prices in the southeastern Asian nation due to the conflict in Ukraine. President Joko Widodo said the ban was to ensure there was food at home for its 278,704,795 people.
“I will monitor and evaluate the implementation of this policy so availability of cooking oil in the domestic market becomes abundant and affordable,” said Widodo as per the Reuters news agency. “This move is rather unfortunate and totally unexpected.”
The ban means that Liberia has to look elsewhere, as the West African country has been a major importer of palm oil and palm oil products from Indonesia. Data from 2020, the latest available, shows that the Asian state exported US$26.3 million to Liberia, including US$19.1 million in palm oil, US$2.59 million in soap, and US$1.04 million in margarine. In the last 25 years, Indonesian export to Liberia has increased from US$1.38 million in 1995 to US$26.3 million in 2020, representing an increment of 12.5 percent, according to the Observatory of Economic Complexity (OEC) visualizes data on global exports.
The ban is also going to have an indirect impact on Liberia.
Indonesia accounts for more than half of global palm oil supplies, producing 44,500 metric tons of crude palm oil last year, according to the U.S. Department of Agriculture. That means supplies cuts for big companies such as Nestle SA which exports household products worldwide, including to Liberia.
In 2020, Russia and Ukraine exported a combined US$15.7 million to Liberia, according to Trading Economics, which provides global trade data and forecasts. But those supplies have ceased to come, as the two former Soviet states battle. Ukraine’s export has been halted as the war is on its soil, while Russia has been slapped with a barrage of international sanctions over its unprovoked war against its neighbor.
The world bank estimates that countries that export rice, corn and wheat will be hurt by global supplies spikes as a result of austerity measures in the U.S., structural slowdown in China and the war in Ukraine.
Story written by The DayLight
