The Covid-19 has had unpredictable effects on the Agri-commodity industry and has caused a deep global economic slowdown. The Agri-commodity sector covers a wide range, from production to import and export of agriculture commodities. Covid-19 hampered the food and beverage industry badly. Concerning the edible oil export industry, the coronavirus pandemic has turned into a dual-shock, affecting both – the supply and demand.
Further, the economic and social impacts of Covid-19 are still unfolding in every other sector as well, such as manufacturing, automotive, construction, etc.
The pandemic had affected every chained activity in trading, including:
Edible oils are cooking oils that are liquid at room temperature and are used in salad dressing, baking, frying, and other types of cooking. These oils are extracted from plants, animals, or synthetic fats. A wide variety of edible oils such as olive oil, coconut, palm, sunflower seed, peanut, palm kernel, lard, butter, etc. is available in the market. The disruption in the global trade market in foods, such as cereals, edible oils, fruits and vegetables, meat, and poultry was minimal.
Despite the Pandemic shock, to keep a continuous flow of trade in the Agri-commodity sector, the governments of different countries and the food and security industry constantly work together.
Covid-19 Impact on Edible Oil Export:
The downturns in the general economic value and the transportation limitations due to covid-19 have seriously affected the oil industry. The oil industry faced a double shock in the pandemic, as the oil prices increased globally, and the supply decreased due to the low availability of cheap labor, corona transportation limitations, and difficulty in getting raw material. This pandemic effect on oil exports is imposed for a short time only and will recover once the pandemic is over, depending upon the length and depth of disruption.
One can easily understand the impact of Covid-19 on world Oil Export from the given stats.
|Financial Year||Quantity (in Million MT)|
The data is taken from a reliable source.
Edible oils are either extracted from plants or from animal fats. Considering health, vegetable or plant edible oils are best.
The Most Consumed Vegetable Oils Worldwide Are:
- Palm oil
- Soybean oil
- Sunflower seeds oil
- Palm Kernel oil
- Peanut oil
- Cottonseed oil
- Coconut oil
- Olive oil
- Rapeseed oil
The following table shows the world vegetable oil consumption of most popular edible oils (palm, soybean, sunflower, palm, peanut, cottonseed, olive, and rapeseed) from the year 2013 to the year 2021
|Financial Year||Consumption in Million Metric Tons|
In the year 2019, the consumption of palm oil decreased in comparison to the previous year. In FY 2018, it was 72.46 million metric tons which reduced to 71.9 million metric tons in FY 2019. The main reason for the reduction in consumption is people’s awareness about their health. Indonesia is the major exporter of palm oil and had faced a huge drop in the exportation value in the pandemic year.
The pandemic outbreak impacts the palm oil industry adversely that can be easily understood by the following:
- India imports 22% less palm oil from Indonesia
- China imports 57% less palm oil
- European Union imports 30% less
- The United States imports 64% less oil.
Survival of Edible Oil Exporters in Covid-19:
The sudden outbreak of the coronavirus made it very difficult for traders to survive in the market. The new trading rules and the change of marketing platforms from physical to digital created a havoc situation in the trade market.
Overall, the potential impact of covid-19 has induced concern over food security and safety. The new rules and regulations covering a wide range of measures, export restrictions, domestic and international limitations make it difficult for traders to survive in the trade market.
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