Due to the outbreak of war in Iran and the blockade of the Strait of Hormuz, India is already facing the problem of shortage in the supply of crude oil. Now, the crisis related to palm oil for the country is also gradually deepening. India is the largest importer of palm oil in the world. The country consumes about 9.5 million tonnes of palm oil every year; However, its domestic production is less than 400,000 tonnes. As a result, India imports almost its entire palm oil requirement from abroad.
palm oil production
Palm oil is obtained from palm trees, which require frequent rainfall and plenty of water to grow well. There are a large number of such palm trees in South-East Asia. To produce palm oil, oil is extracted from these trees and then shipped to the rest of the world. India, too, sources most of its palm oil imports from Indonesia and Malaysia.
Indonesia took a big decision
As mentioned earlier, India imports more than 90 percent of its palm oil needs—about half of which comes from Indonesia alone. Indonesia has now decided that it will prioritize using its palm oil production domestically to make biodiesel (B50), rather than exporting it. This move by Indonesia is expected to reduce the annual supply of palm oil in the global market by 1.5 to 2 million tonnes.