Cooking oil, food prices set to spike on Indonesia palm oil export ban
Consumers in Kenya are already paying more for everything from, cooking oil, and packaged food products to soaps. All indications are that these items are set to burn a bigger hole in their pockets.
This follows Indonesia’s move last week to ban exports of palm oil. Indonesia is currently the world’s biggest producer of palm oil followed closely by Malaysia.
Palm oil is used in the making of nearly half the items on supermarket shelves including bread, biscuit, chocolates, face cream, lipstick, soaps, detergents, and much more.
Top food and consumer products manufacturers including Unilever, Procter & Gamble, and Nestle are set to suffer a body blow as Indonesia moves to plug a domestic shortfall in the supply of the commodity.
All vegetable oil prices are set to jump on supply disruption. Importers hoping a bumper sunflower crop from top exporter Ukraine might not get the relief following nearly two months of war between Russia and Ukraine that has chocked supplies from Kyiv.
The Russia- Ukraine conflict has constrained the supply of major fuel and food items like palm oil into Kenya’s industry.
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According to the latest data from the Kenya National Bureau of Standards (KNBS), a litre of cooking oil retailed at an average of Sh332.37 last month compared to Sh245.92 in March 2021 on the back of a jump in palm oil prices, the main raw material for the product.
In the same vein, the price of a bar of laundry soap, which also has palm oil or other vegetable oils as a key ingredient, soared by 20.9 percent in the period to retail at an average of Sh144.92 for an 800-gramme bar.
The cost of 500 grammes of detergent has also gone up, recording a 12 percent jump to Sh184.60
Cooking oil manufacturers in Kenya were paying up to $1,946 (Kes223,693) for a tonne of palm oil at the start of March, compared to $1,490 (Kes171,276) before the Ukraine conflict began in mid-February.
All vegetable oil prices are set to jump on supply disruption and buyers can’t replace the Indonesian palm oil shortfall that is likely to hit the world markets going forward.