Apr 28, 2022 - Economy

Why cooking oil prices are surging

Vegetable oil index
Data: UN Food and Agriculture Organization; Chart: Jacque Schrag/Axios

Vegetable oil prices have surged over the last few months, as the war in Ukraine drove up their already rising costs.

Why it matters: The situation is worse now. Indonesia said it would suspend exports of palm oil this week, sending markets for cooking oils into chaos, as Bloomberg reported.

  • The country is the world's largest supplier of the commodity, a crucial cooking ingredient in India and other places around the world, as well as a key part of many processed foods.
  • Palm oil accounts for 58% of all the oils traded in the world, said Joseph Glauber, a senior research fellow at the International Food Policy Research Institute, who is tracking the current volatility in food prices. "It's big."

The bottom line: This is another factor driving up food prices and contributing to shortages for U.S. consumers — and a major issue for folks in poorer countries who rely on cooking oil as a source of crucial calories and, simply, to cook their food.

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