U.S. green energy push sets global edible oils alight, raises food inflation fears

U.S. green energy push sets global edible oils alight, raises food inflation fears

News: U.S. green energy push sets global edible oils alight, raises food inflation fears.

SINGAPORE (Reuters) – U.S. President Joe Biden’s environmentally friendly fuel consumption on edible oils is helping to raise vegetable oil prices, which are already near record highs, hit key cost-sensitive consumers in India and Africa, and contribute to global inflation fears To stir up food.

The United Nations vegetable oil price index has risen 70% since June last year to a nine-year high after labor shortages on Asian palm plantations and bad weather at key sunflower, rapeseed and soybean centers squeezed edible oil production and brought stocks to 10-year lows.

The rise in edible oil prices has helped the broader United Nations food price index rise to its highest level since 2014, stinging consumers in developing countries and challenging policymakers trying to stimulate economic growth.

(Graphic: Edible oils lead the way as global food prices rise to multi-year highs πŸ™‚

A steep rebound in edible oil demand as consumers and businesses replenished after the COVID-19 lockdown has exacerbated the narrowness, as has Biden’s election victory and the promised “clean energy revolution,” which should fuel demand for biofuels .

“Following the election of President Biden, a new factor has emerged that has forecast increased demand for 100% biodiesel soybean oil,” said Dorab Mistry, senior edible oils analyst.

“Four refineries have already announced that they will stop refining fossil fuels (and instead start producing vegetable oil-based fuel).”

(Chart: Global Edible Oil Production, Demand, Imports, and Inventories πŸ™‚

The sharp rise in the price of all edible oils, vital to the preparation of food and the daily nutrition of billions of people, is already harming some consumers.

A 20% rise in palm oil prices in Myanmar since a February 1 military coup is one of the many worrying signs for vulnerable people this week, according to the World Food Program (WFP).

More expensive oils are also curbing demand in India, the world’s largest buyer of vegetable oil, and are expected to hold back imports as consumers are forced to cut back despite efforts to reopen the economy due to COVID-19 lockdowns.

(Graphic: Food prices in Myanmar are rising after weeks of unrest following a military coup on February 1st πŸ™‚

“We expected demand to recover after the country opened up, but India’s edible oil imports will remain at last year’s level at 13.2 million tons,” said Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil broker.

“Previously, imports were forecast at 14 million tons for 2021, but higher prices are destroying demand.”

(Graphic: Global vegetable oils reach a multi-year high due to the scarce supply and increasing demand; exceed fuel prices πŸ™‚

The Malaysian palm oil futures, the price benchmark for the world’s most heavily traded edible oil, recently exceeded 4,000 ringgits per ton for the first time since 2008.

Rapeseed oil added around a quarter of its value this year, while sunflower oil from the Black Sea has increased by almost 30%. Soybean oil rose over 27% in 2021.

(Graphic: 2-year diagram of the relative performance of global edible oils compared to the reference prices for gas oil / diesel πŸ™‚

“There’s this age-old argument about food versus fuel, but nobody dares talk about it as it’s all about green energy now,” Mistry, director at Godrej International, told Reuters.

“It will be a long time, and noises from the developing world, before people actually try to slow down the rate at which green energy is being produced.”

Food consumers are already reducing.

India’s palm oil imports fell 27% yoy in February to their lowest level in nine months, a leading trade organization said last week, reflecting a slowdown in domestic demand.

“We are also being informed by people shipping canned palm oil that demand from Africa has slowed,” added Mistry.

(Graphic: India’s palm oil imports fall in February after a strong price recovery πŸ™‚

With U.S. soybean stocks set to drop below 4 million tons this season from over 14 million last year, U.S. soybean oil prices could stay strong for months, Mistry said.

However, palm oil production in Asia is likely to increase from April, which should help cool the broader global vegetable oil market, he added.

(Graphic: Palm oil production in Malaysia is expected to recover from the last 5-year low πŸ™‚

In addition, the push for electronic vehicles will help limit the increased use of edible oil for biodiesel, said Phin Ziebell, agribusiness economist at the National Australia Bank in Melbourne.

“Biodiesel is more likely to be used in heavy haulage such as trucks and trains, and in earthmoving and construction,” he said.

Reporting from Naveen Thukral; Arrangement by Richard Pullin

Original Source Β© Reuters

The Techgadgetguides is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com Inc.
We will be happy to hear your thoughts

Leave a reply

For security, use of Google's reCAPTCHA service is required which is subject to the Google Privacy Policy and Terms of Use.

I agree to these terms.

Tech Reviews and Guides | Techgadgetguides.com
Logo