Jakarta: Approximately three weeks after the Russian troops invaded Ukraine, Indonesian housewife Liesye Setiana was forced to close the banana chip business due to the national depletion of cooking oil supplies. Millions of consumers and small business owners in the world’s fourth most populous country have been rattling for months due to soaring cooking oil prices. As the war between producers of the two major grains and sunflower seeds disrupted the global market, many producers rushed to shift their goods abroad and earn cash at soaring rates.

Setiana went to a supermarket for over an hour from the remote village of Barharjo in East Java and bought an 8 liter batch of palm oil daily to keep her business alive. However, the two 49-year-old mothers were rejected because her seller had significantly distributed the products used in products ranging from cosmetics to chocolate spreads. “I told my employees that I was smoking and I really needed personal cooking oil, not storage,” she said, selling delicious yellow snacks and earning Rp750,000 ($ 52) a day. But Setiana said. She asked, “Why is there a shortage of cooking oil when Indonesia is the number one palm oil producer in the world?”

Her struggle for supplies is just a snapshot of the cooking oil crisis that has spurred hours of procession of jerrycan-picked residents on Indonesia’s most populous islands such as Java and Borneo. According to local media, two people died exhausted in March. It also includes people who lined up in three different supermarkets, according to local media.

Count the cost

Indonesia produces about 60% of the world’s palm oil supply, one-third of which is consumed domestically. India, China, European Union and Pakistan are one of the major export customers. Due to pressure on cooking oil at home, the Indonesian government imposed an export ban that was lifted last month, eased prices and strengthened domestic supply.

However, according to official data, as of the end of May, the price of the most affordable bulk cooking oil in the country has exceeded the government’s target of 14,000 rupiah, averaging about 18,300 rupiah per liter. Soaring prices have forced many to make difficult decisions. Called by one name, like many Indonesians, Staryo runs a tempeh chip business at his home in South Jakarta. He soared his prices and was forced to sever his four employees and float.

“After the price of cooking oil soars, we need to calculate production costs wisely. Our consumers have no choice but to accept the higher price of Cripic Tempe,” he said. Said referring to a soy-based cracker. Demand has not yet recovered, Staryo’s home factory production has fallen from 300 to 100 kilograms per day, and daily earnings have fallen from 15 million rupiah before the pandemic to 6 million rupiah. .. About half a dozen workers slice tempe into thin slices and then throw them into a hot oil frying pan to bake until crispy. When some workers fry tempeh chips outside due to lack of space, it’s far from the hustle and bustle of the pre-pandemic peak of business, Staryo said.

“Significant” impact on the poor

Cooking oil prices had already risen in 2021, but were hit record highs as a result of the Moscow raid, said Mohammad Faisal, executive director of a think tank at the Center for Economic Reform (CORE Indonesia). The government is currently working to secure more supplies in the country. That is, he said, it is unlikely that the surge seen after Russia’s invasion of Ukraine will repeat itself.

However, while prices can fall in Indonesian towns and cities, they remain high for rural and remote people like Setiana. “For low-income earners, the impact is enormous, as prices rise at the same time. [of other commodities]Faisal told AFP. Setiana has other concerns, such as being unable to pay her children school fees, as local prices are unlikely to fall and little money has been paid since her husband was fired. “If the price of a standard product goes up, there is almost no other cost left.” -AFP

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