Wilmar Africa Limited, one of Ghana’s leading producers of food products has warned of a possible shortage and spike in prices of cooking oil if Indonesia’s export ban on crude palm oil persists.
Ghanaian consumers are already paying high prices for everything from fresh produce to frozen and imported goods.
Speaking to Citi Business News about the repercussions of the move, the Managing Director of Wilmar Africa Limited, producers of Frytol, Kwame Wiafe, noted that Ghanaian suppliers have enough stock for 3 months but will struggle to supply the market after that stock runs out.
“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 our prices are tied to prices on the international market,” he added.
Indonesia, the world’s biggest producer of palm oil, decided to halt exports of the commodity to ensure availability to its nationals.
Palm oil is used in nearly half the items we find on various supermarket shelves including pizza dough, bread, biscuit, chocolates, Nutella, face cream, lipstick, soaps, detergents, and more. Palm oil is even a biofuel input.
President Joko Widodo said in a statement on April 27, 2022, that the ban would be lifted once local demand is met and prices stabilised.
Palm oil is by far the most consumed and traded edible oil in the world. According to the United States Department of Agriculture, 77 million tons of palm oil are expected to be produced this year – with Indonesia accounting for around 60 per cent of the global supply share. Malaysia ranks second with a 25 per cent supply share.