Will the palm export ban by Indonesia likely to impact India? Is it likely to put pressure on FMCG margins?

The latest decision by Indonesia to ban export of palm oil is a major shock to Indian FMCG industry which depends heavily on Indonesia for palm oil imports. Palm oil is one of the most used cooking oils in the world. Indonesia stopped palm oil exports due to soaring domestic inflation. It is likely to spike food inflation in India since sunflower oil exports are under Black Sea embargo. The option is Malaysia, Thailand and African economies.

FMCG companies have been struggling with thinning margins for over 2 quarters and Q4 is going to be as difficult. FMCG stocks may came under further pressure after Indonesia banned the export of palm oil. Indian FMCG companies depend heavily on Indonesia and Malaysia to supply palm oil, an important input for food products. This will keep up the pressure on FMCG operating margins.