Soybean oil prices soared to a record high on Friday as Indonesia's decision to effectively ban exports of palm oil heightened concerns about already depleted global supplies of alternative vegetable oils and added further fuel to global food inflation.
The loss of shipments from Ukraine, the world's top supplier of sunflower oil, and drought in the world's top soybean oil exporter, Argentina has helped to spark a sharp rise in global vegetable oil prices so far this year.
Soybean oil prices on the Chicago Board of Trade rose to a peak of 83.21 cents per lb on Friday, up 4.5% on the day and a record high.
Prices have now risen by almost 50% so far this year.
Palm Oil Exports
Indonesia, the world's top producer and exporter of palm oil, blocked exports to tackle rising domestic prices but the move looks set to fuel already surging food inflation elsewhere.
"This is bad news for vegetable oil consumers in many countries which currently strongly depend on palm oil in view of shortages in sunflower oil, rapeseed oil and soy oil," Siegfried Falk, an analyst at Hamburg-based Oil World, said.
"Indonesian policymakers are again seeking the conflict with their palm oil industry in their desperate fight against domestic food price inflation, thereby fuelling inflation elsewhere," he added.
Food inflation has become a major concern around the globe following Russia's invasion of Ukraine, a major exporter of wheat, corn, barley, sunflower oil and rapeseed oil.
The United Nations food agency reported earlier this month that food prices had jumped nearly 13% in March to a new record high.
Indonesia will effectively ban palm oil exports from 28 April, until further notice, after President Joko Widodo announced on Friday a halting of shipments of cooking oil and its raw material.
Palm oil is the world's most widely used vegetable oil and is used in the manufacture of many products including biscuits, margarine, laundry detergents and chocolate.