Palm oil to the rescue

The Russia-Ukraine war has not just disrupted the global energy market but also wreaked havoc on commodity markets.

The supply of nickel and palladium, which are critical metals in electronics, has been disrupted. That in turn has disrupted the car supply chain.

Now, the waiting time for new cars has increased significantly. Fertiliser is the other casualty in the war because Russia and Ukraine are major suppliers of fertilisers to the world, including potash and urea.

The impact on agriculture is felt worldwide. It is, therefore, no wonder that economists now talk about hyperinflation and recession.

Here at home, one commodity that has generated much discussion is vegetable oils. Ukraine and Russia supply a major share of the world demand for sunflower oil. The European Union, for example, is an avid consumer of sunflower oil.

With the disruption in supply because of the war in Ukraine, the EU and many other sunflower oil-importing countries have no choice but to look for alternatives.

Palm oil is one attractive alternative. More than 30 per cent of the world trade in edible oils is taken up by palm oil.

It is also the most productive oil crop, leading all the other oils by almost tenfold for every hectare of planting. It is unfortunate that many countries, especially around the EU region, chose to discredit palm oil on many fronts. All unjustified.

With the supply disruption to sunflower oil, many such countries have to swallow their pride and turn to palm oil. For many years, the palm oil industry has been tormented by companies that looked down on palm oil.

They resort to unsavoury measures to decry palm oil on their product labels.

At the Malaysian Palm Oil Promotion Council, now MPOC, we used to have programmes in many places to counter such attacks on palm oil. I remember we went to Australia and the EU to diffuse such biased claims.

What becomes clear now is that palm oil has always been a good oil for nutrition. All past attacks on palm oil have been fuelled by the need to maintain the competition of their own oils.

We have always said that all the blame on palm oil, whether to do with the environment or nutrition, has been based on fake facts.

In a way, the war in Ukraine has proven to be a blessing to palm oil.

Small farmers are now enjoying the lucrative price which, at one time, was hitting RM9,000 per tonne of oil, a historic level.

Hopefully, with the introduction of more labour-saving automation, things will improve in future.

One thing is certain: palm oil will always be there to rescue the world from an edible oil shortage.

New Straits Times

Tags: potash, hyperinflation, recession, Ukraine, commodity markets, Russia, sunflower oil, vegetable oils, palm oil, edible oils, Fertiliser, urea