While this is straining the nerves and budgets of millions of Africans, like Kamanja in Nairobi and Belem in Abidjan, it is also presenting some opportunities on the continent.
In March, for the first time, it temporarily became the costliest among the four major edible oils in India, considered a global price bellwether, signalling that the days when Africa's go-to oil was reliably the cheapest could be over. Lately, however, World Bank data show it's been catching up to rivals, particularly soy and sunflower oil. The contract, which jumped more than 9% on Wednesday, has now risen by close to 50% this year.Ĭulinary tradition aside, the choice of palm oil has also been an economic one for many poor countries, given it has historically been the cheapest of the major vegetable oils. On March 9, about two weeks after Russia's invasion, the Malaysian crude palm oil contract that serves as the global benchmark topped out at a record 7,268 ringgit ($1,718) per tonne, nearly double the price a year earlier. "We have had really almost a perfect storm." "You almost couldn't make it up how bad it's been," Fry added. If that wasn't enough, high crude oil prices – another consequence of the war – have added further pressure to vegetable oil supplies by increasing demand for biofuels. Then Russia sent its military into Ukraine in February, disrupting shipments from the Black Sea region, which accounts for 60% of sunflower production and over three-quarters of exports, and wiping out a huge share of global supply. "The only bright spot, in a way, was sunflower," said LMC's Fry. Poor weather in Indonesia and COVID-related immigration restrictions in Malaysia throttled palm oil output and caused labour shortages on plantations. In March the FAO's global price index for meat, dairy, cereals, sugar and oils hit its highest level since its inception in 1990, after a 12.6% "giant leap" from February.Ĭooking oils have been among the products hardest hit.ĭrought decimated soy oil exports from Argentina and rapeseed production in Canada. Food commodity prices climbed over 23% last year, the fastest pace in more than a decade, according the United Nations Food and Agriculture Organization (FAO). I don't know how we're going to survive."Įven before the outbreak of fighting in Ukraine, inflation had become a global concern. I don't know where we're heading to, because food has almost doubled in price," she said. Lucy Kamanja, a beauty industry consultant in Kenya's capital Nairobi, said a 90% increase in palm-based cooking oil means she's had to cut down on fruit and household essentials. Indeed in sub-Saharan Africa, food expenses already account for 40% of households' consumer spending, the highest proportion of any region in the world, and more than double the 17% spent on food in advanced economies.Īnd as prices rise rapidly across the board, including fuel, and tens of millions of Africans already pushed into extreme poverty by the pandemic, spiking palm oil prices will help force many to make tough choices. "It will be the poorest in big countries or countries in Africa who will almost certainly have to bear the brunt." "We've never really tested this kind of situation," said James Fry, founder of agricultural commodities consultancy LMC International. A senior government official said on Tuesday that the ban could be widened.
The upheaval pushed top palm oil exporter Indonesia to ban some exports in recent days, in a effort to keep a lid on domestic prices. The conflict has helped propel prices for palm oil - ubiquitous in African dishes from Nigerian jollof rice to Ivorian sticky alloco plantains - to record highs that experts say will deepen a food-cost crisis and punish the poorest.
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