Comment on Global Food & Biofuel Price Shocks

Indonesia sent shockwaves through the global markets for both food and fuel by banning exports of palm oil on April 28th. Those markets had already been roiled by Russia’s attack on Ukraine, a key producer of sunflower oil, as Mighty Earth Founder & CEO Glenn Hurowitz recently discussed with the BBC, and Indonesia’s move is widely viewed as a desperation move to calm political unrest fueled by rising domestic palm oil prices.

“For Indonesia, the sudden shortage – and high cost – of cooking palm oil is a classic example of a resource curse, as our economy depends too much on a single export commodity, giving far too much power to corporate palm oil exporters,” said Annisa Rahmawati, Senior Advisor at Mighty Earth. “Indonesia’s government should focus on supporting small farmers, helping the people who meet local needs rather than leaving our families vulnerable to marketand corruption crises.”

Many world governments looking to quit Russian oil & gas have looked to biofuels to increase supplies. But that’s only increased competition for food oil and pushed cooking oil prices higher

“Big shocks like this expose how our governmental policies have totally failed to build resilience into our agricultural systems, leaving them brittle and unable to respond to crisis. These failures are now cascading down our supply chains and as a direct result, we see families from Southeast Asia to the Americas to Europe suffering from cooking oil and fuel shortages and price spikes,” said Mighty Earth’s Glenn Hurowitz. “The tragedy is that the entirety of the food price spikes from Russia’s war in Ukraine could be counteracted just by cutting in half biofuel mandates. It doesn’t make sense to keep burning food for fuel during this crisis.”

Mighty Earth and its partners hosted a media briefing to talk about the impact of Indonesia’s refined palm oil export ban, as well as global bioenergy mandates. 

Speakers included:

Moderated by Glenn Hurowitz, Mighty Earth Founder and CEO

Media Contact: Miles Grant, [email protected], 703-864-9599 (m)