maintenance. Shortage: After sunflower oil and soon palm oil, what are the consequences for France?

Facing the shortage, Indonesia, the world’s largest palm oil producer, has announced that it will suspend all of its exports. But what are the consequences for France? Will we see Nutella jars disappear from supermarket shelves? Interview with Thierry Bach, an economist specializing in agriculture.

Tensions have been observed in the oil market for several months…

completely. Since 2021, due to the economic recovery, there have been tensions in the oil market. It was reinforced by the war in Ukraine. The country, a major producer of sunflower oil, exports less and less. Thus, demand, which has been strong since 2021, is driving the price to all-time highs. At the beginning of the week, the price of a ton of sunflower oil reached $2,300. By comparison, it was about $1,000 at the beginning of last year.

Faced with this situation, restaurateurs and food manufacturers are modifying their recipes by using sunflower oil in smaller quantities or using substitutes. Thus, indications are already showing that in the food industry, the demand for palm oil has increased. There is actually a domino effect, which started with sunflower oil, spread to rapeseed oil, and is now affecting palm oil.

Why did Indonesia decide to suspend palm oil exports?

Over the past few weeks, the entire Southeast Asian archipelago has been facing a shortage of palm oil. Because global demand matters. Indonesia provides about 60% of production. The country is seeing high prices because it uses a lot of palm oil for cooking. The prospect of such price hikes has raised fears of social tensions in the country, as a result of which Indonesia has decided to suspend its exports. This is in order to favor the supply of its residents and try to better control the prices that are practiced in the local market.

But this decision will only amplify the process. Worldwide, very little fat will be available from palm oil. Engineers and processors will look for other types of oil…it will be a vicious cycle.

Concretely, what are the consequences of this in France?

Countries like India, China, Bangladesh and Pakistan, which are major consumers of palm oil, will find themselves facing many problems. In France, either there will be a shortage in the short term, because we have the possibility of replacing palm oil with an alternative, which is not at all certain. Or a vicious cycle of multiplying these oils, and palm oil in particular, will begin. At that time, we will face an ever-increasing shortage.

Among the products that contain the most palm oil, we can cite chips, toast, salad, spreads, biscuits, some brands of canned sardines, some types of mayonnaise, ice cream, ready meals … They are also present in some shampoos. In France, palm oil is somewhat regulated, since it is considered harmful to health and the environment. But these are all the same products that can be harmful to the consumer.

Faced with this shortage, what alternatives will manufacturers resort to?

There is, for example, peanut oil, which comes more from the African continent, especially from sub-Saharan Africa. There can be a rush on the olive oil. Indications are already showing high prices. Also rapeseed oil. But there are not many alternatives.

Originally, vegetable oils were intended to replace animal fats that were more expensive, such as butter. We could go back to a slightly intense use of butter in food products, but it’s very expensive today… Expectations are complicated.

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