Global Vegetable Oil Volatility Driven by Climate and Supply Chain Issues
What happened
The Solvent Extractors’ Association of India highlighted potential volatility in the global edible oil sector. This uncertainty stems from the possible impact of El Nino, ongoing supply issues for sunflower oil due to the Russia-Ukraine conflict, and Indonesia’s B50 biodiesel program.
Why it matters
These factors could alter the global vegetable oil balance, potentially increasing the strategic importance of soybean and soybean oil. Additionally, policy uncertainty in India regarding de-oiled rice bran (DORB) affects investment and capacity revival in the domestic industry.
El Nino is expected to increase energy import pressures and affect production and trade across Southeast Asia.
Who's involved
- IndonesiaImplementing the B50 biodiesel program, which affects global oil balance.
- El NinoClimate pattern whose impact is cited as a driver of global oil sector volatility.
- IndiaIndustry group monitoring edible oil stocks and policy uncertainty in India.
- Southeast AsiaRegion expected to face increased energy import pressures due to El Nino.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- IndiaSpeculative
India might face changes in domestic edible oil supply and prices due to global oil volatility.
- Southeast AsiaSpeculative
Southeast Asia could see changes in regional oil balance due to Indonesia's biodiesel program.
Keep exploring
The entities involved
Related events
- El Niño is causing climate change impacts on global commodity supply, specifically affecting sugar and palm oil production in Indonesia.
- Amid geopolitical tensions in the Middle East, Indonesia faces challenges in its oil sector, leading to discussions about the future of fossil fuels versus renewables.
- Indonesia's government is managing food reserves in response to climate cycle impacts.
- In late 2007, El Niño caused significant weather disruptions, leading to reduced food production and the shutdown of key oil trade routes.
- Indonesia is implementing specific policies to manage El Nino's impact on crude palm oil output and energy imports.