Question of the Day: Will Indonesia's ban on palm oil exports cause a crisis in Russia?

As you know, from April 28, Indonesia decided to ban the export of palm oil against the backdrop of a shortage of this product in the country, the Nikkei newspaper reports. Indonesian President Joko Widodo said on Friday that the ban is in place indefinitely.

Indonesia is Russia's number one partner in importing this type of product. In 2021, the volume of palm oil supplies from Indonesia exceeded 1 million tons.

By the way, Malaysia, which, following Indonesia, also stops the supply of palm oil to Russia, which ranks second in terms of its export to Russia, supplies our country with only 6.3 thousand tons of this raw material.

Now it will be interesting to observe the range and prices of dairy products. Surely, there are some operational stocks of palm oil in warehouses, and they will probably last for two to three months. But then everything will depend on the decisions that the Indonesian government will make.

All Russian equipment, according to experts, was purchased in Sweden and Belgium specifically for the "palm tree" and cannot work with any other raw materials. But now other “separators-pasteurizers-cheese factories” and others are absolutely inaccessible due to sanctions.

Network analyst Anatoly Nesmiyan believes that this situation is symmetrical to what happened in 2010, when Russia imposed an embargo on grain exports due to a severe drought. Then this ban hit the countries dependent on Russian supplies - the main of which was Egypt. As a result, after only three months, riots broke out there, which ended six months later with the collapse of the Mubarak regime: “Russia is extremely dependent on the supply of palm oil. The problem is the poverty of the population, which cannot afford normal food, and therefore is forced to buy poisonous surrogates, the basis of which is just palm oil. This is a real problem, because in the event of a shortage of palm oil, we will not eat healthier food. We will eat the same poison, but much more expensive. “Normal” food will rise in price even more…”

Another analyst, Aleksey Roshchin, even calls the situation a “collapse”: “The collapse in the literal sense of the entire domestic food industry, the only more or less successfully operating industry in the Russian Federation. Because if not "palm" - then what?? What am I asking you?! What will they feed us, miserable Russians now?!

Just do not say that now, out of grief, we will be flooded with natural butter and real cottage cheese, not to mention all sorts of "curds". This, of course, cannot be, because this can never be. In Russia, there are simply not so many cows and so many dairies to feed 145 million snouts with natural milk (and honey, I would like to add). SIMPLY NO. (...) If now the “palm tree” is removed, what will remain? What will they replace it with - denatured alcohol? Donkey urine? But we don't have that many donkeys! Perhaps we will have to grow palm trees ourselves - they seem to grow in Crimea ... But then we will have to plant the entire Crimea with palm trees - and where to rest ?!”

On the other hand, it is possible that analysts are wrong in their forecasts. It is known that the events in Ukraine had a positive impact on the Indonesian economy, Bloomberg writes, as world prices for three important exports of the country: metals, coal and edible (palm) oil rose. In March, Indonesia's exports grew by 44% yoy to $26.5 billion with a positive balance of $4.5 billion - above all forecasts. Economists are already forecasting that Indonesia will run a 0.5% deficit this year instead of the planned 1.9%. Apparently, it was precisely because of the increased volume of palm oil exports that the Indonesian government was forced to temporarily suspend it. And there is hardly any doubt that this country will resume the export of valuable raw materials, and most likely this will happen before it disappears from Russia's warehouses. So it's probably too early to worry.