24.1 C
Friday, April 19, 2024
HomeBusinessHow Africa is bearing the brunt of palm oil's perfect storm

How Africa is bearing the brunt of palm oil’s perfect storm


ABIDJAN, April 27 (Reuters) – Djeneba Belem’s fried bean cake stall in Abidjan is a world away from the war raging in Ukraine. But her business is now at the mercy of an unexpected consequence: runaway palm oil prices.

“I didn’t even want to sell anymore because I thought, if the price of oil had gone up that much, what am I going to earn?” she said as she stirred a batch of cakes at her street-side stall in Ivory Coast’s lagoon-side commercial capital.

Neither Russia nor Ukraine produces palm oil, a tropical commodity, but Moscow’s invasion has triggered knock-on effects across today’s intricately interconnected global economy.

The conflict has helped propel prices for palm oil – ubiquitous in African dishes from Nigerian jollof rice to Ivorian sticky alloco plantains – to record highs that experts say will deepen a food-cost crisis and punish the poorest.

The upheaval pushed top palm oil exporter Indonesia to ban some exports in recent days, in a effort to keep a lid on domestic prices. A senior government official said on Tuesday that the ban could be widened.

“We’ve never really tested this kind of situation,” said James Fry, founder of agricultural commodities consultancy LMC International. “It will be the poorest in big countries or countries in Africa who will almost certainly have to bear the brunt.”

Indeed in sub-Saharan Africa, food expenses already account for 40% of households’ consumer spending, the highest proportion of any region in the world, and more than double the 17% spent on food in advanced economies.

And as prices rise rapidly across the board, including fuel, and tens of millions of Africans already pushed into extreme poverty by the pandemic, spiking palm oil prices will help force many to make tough choices.

Lucy Kamanja, a beauty industry consultant in Kenya’s capital Nairobi, said a 90% increase in palm-based cooking oil means she’s had to cut down on fruit and household essentials.

“I’m very worried. I don’t know where we’re heading to, because food has almost doubled in price,” she said. “The common person … I don’t know how we’re going to survive.”

Even before the outbreak of fighting in Ukraine, inflation had become a global concern. Food commodity prices climbed over 23% last year, the fastest pace in more than a decade, according the United Nations Food and Agriculture Organization (FAO).

Read more


Most Popular

Contact a Program
If you are interested in a program or advertising, send us a message.
Send Message
Signup for our Newsletter
We'll only be in touch when we've something exciting to share.
We never share your details
No thanks