The Future of Work Capsules: A look at commodity developments and the looming global crisis

Rising food prices

Happy Mother’s Day to all moms, both here on Earth and up in Heaven. I’m forever grateful, and I look up to you more than you know. Happy Mother’s Day to an amazing woman I’ll always admire, appreciate and love! I wish you well, too, if you endeavour to be a good mother figure to this present generation. May the world’s definition of terms not corrupt your moral values and understanding of the true African family system. Let’s celebrate our mothers.

 Are you aware of the emerging cooking-oil crisis? Oil market heads for ‘biggest supply crisis in decades’ with Russia’s exports set to fall, according to CNBC news. Oil crisis – a sudden rise in the price of oil that is often accompanied by decreased supply. Since oil provides the main source of energy for advanced industrial economies, an oil crisis can endanger economic and political stability throughout the global economy.

The 1973 oil crisis – or first oil crisis of October 1973 of the Yom Kippur War – could offer some lessons. The crisis played a key role in the economic downturn of the 1970s. Oil prices jumped 350%, and the higher costs rippled through the economy. Although business and government asked consumers to help by conserving energy and entrepreneurs worked on solutions, the economic crisis worsened. As things got more expensive, businesses laid-off workers. Inflation and economic stagnation produced ‘stagflation’ – which shook confidence as recorded by the American museum account of the crisis. Are you ready for the future of work? What informs your readiness?

There are lessons we can learn from commodity markets’ developments as we take a closer look at the looming cooking-oil crisis. History often repeats itself. Being students of history, understanding the past prepares us for the future.

The current Russian and Ukraine war could have some effects on crude oil, natural gas, fertiliser, wheat and metals supply at minimum. The war in Ukraine has been a major shock to commodity markets, coming on top of pandemic-related supply chain disruptions as well as production shortfalls. The war has led to significant disruptions in the production and trade of commodities for which Russia and Ukraine are key exporters, including food commodities (such as wheat and sunflower oil) as well as inputs used to grow food (coal, natural gas and fertiliser). A continuation of the war beyond this year could reverse the expected easing of food commodity prices in 2023, as postulated by the recent World Bank report on the impact of war in Ukraine on commodity markets.

Rising food prices could increase food insecurity. This could increase even more, given the reliance on food imports from Ukraine and Russia. Even before the Ukraine war, the COVID-19 pandemic had already taken a toll on food insecurity. According to the Global Report on Food Crises, an estimated 161 million people were facing a food crisis or worse in 2021, up from 147 million in 2020. Populations facing a crisis, which are typically in countries with conflict, include Democratic Republic of Congo (26 million), Afghanistan (23 million), Nigeria (23 million), Ethiopia (16 million) and Yemen (16 million). On war-driven disruptions in food trade, higher food price inflation and higher costs of administering food assistance, efforts are likely to make more people food-insecure.

Narrowing down to something as basic as cooking-oil, what do we need to know about the looming global oil crisis? According to data from the United States Department of Agriculture, 85% of global palm oil production comes from Indonesia and Malaysia. Ukraine and Russia are the leading sun-flower oil producing countries. Vegetable oils production countries remain Indonesia, China and Malaysia.

This one affects each one of us, as there is an emerging global cooking-oil crisis looming that will soon be felt in our kitchens. The biggest producer of palm oil has blocked its ports, the world’s biggest exporters of sunflower oil are at war, the producers of soya bean oil are battling the climate crisis – and so are producers of granular oil. Should you be worried? Where next can we source our cooking-oil to support running our kitchens and food preparation.

As the world celebrates Mother’s Day, I share something for you to ponder. These celebrations usually come with feasting, cooking, partying and love feasts. We need food to celebrate, and oils usually will play a very significant role. Are you vegetarian? Your salads will need oil for dressing. If you enjoy the big fish and other animal protein, you will need oil for cooking. From baking to grilling, air-frying to deep-frying, we need oils: but oil supplies are running dry. What does the future hold? Should we be stocking up? Let’s take a closer look at what is really happening in our world now. For the future, our ability to learn from the past will support us in making informed decisions.

Ukraine is the world’s biggest exporter of sunflower seed oil, and exports 5.4 million tonnes of edible oil each year – which is almost half of the world’s sunflower oil supply, but Ukraine is at war and supplies have been cut. Here comes also Russia, accounting for 25% of the world’s sunflower oil – and Russia is the one wagging this war, affecting the supply chain of edible oils too.

Let’s get to Canada to observe as the worlds’ top exporter of rapeseed oil is experiencing extreme weather and climate issues. Argentina, Brazil and Paraguay are among the top exporters of soya-bean oil, but these countries are battling severe drought. Malaysia, the world’s second-biggest exporter of palm oil, is experiencing what we know to be labour shortages and oil supply chains are drying up.

Indonesia is the biggest exporter of palm oil, and the 2022 report indicates the country is banning palm oil exports due to local shortages.

There is an increase of 40% in price of palm oil and people are protesting against the price increase – a reason that accounts for governments ban on exports of palm oil. According to Aljazeera news, Indonesia – the world’s biggest edible oils shipper – will widen an export ban to include crude palm oil, adding to uncertainty in a market that’s suffered dizzying price swings and is threatening to worsen global food inflation.

Meanwhile, they account for one-third of the world’s oils exports which comprise 30 million tonnes of vegetable oil every year. India and China are some of Indonesia’s biggest oil buyers. India depends on Indonesia for nearly half of its palm oil supply as it imports 13 million tonnes of edible oils each year. Out of this total, palm oil account for 60% while soya bean oil and sunflower oil account for 25% and 12% respectively.

High consumption and insufficient oil seed production could explain these high imports. In India, reports have it that per capita edible oil consumption is 19kg per person per year. Whichever countries are you and wherever your oil supplies come from, the supply chains are drying up.

Looking at country exporters of palm oil, we can mention Indonesia (55%), Malaysia (31.2%), Netherlands (3.7%), Germany (1.2%), Estonia (0.7%), and the rest of the world for 8.2%. But all these put together cannot compensate for Indonesia’s exports.  The demand is more than the supply. Experts warn prices of edible cooking oils could go up by 20%. Developing countries could be the hardest hit because they depend on cheaper cooking oils like palm oil, as against more expensive options like olive oil and sunflower oil. Prices of oils are soaring as we see increases in the US and European markets for Palm oil, Rapeseed and Vegetable cooking oils.

As a Ghanaian and African, be encouraged to return to Eden. Sankofa is good. Palm oil, coconut oil and palm kernel oil are among some of the best organic edible cooking oils. This is the time to make a fortune from the looming cooking-oil crisis. Get to Northern Ghana; families still cook with the Shea butter because it’s organic. Allow me to be your influencer to make healthy edible choices.

According to health-line: “Some seed oils, such as sunflower oil, vegetable oil, soy-bean oil and canola oil, are considered to be ‘refined’.  Seed oils are ‘highly inflammatory and toxic’ to the body, and should not be used when cooking. Refined vegetable oils were not available until the 20th century, when the technology to extract them became available. These are extracted from plants using either a chemical solvent or oil-mill then often purified, refined and sometimes chemically altered. Health-conscious consumers prefer oils that are made by crushing or pressing plants or seeds, rather than those produced using chemicals”. Use more of the natural coconut and palm oils.

I have always said that my philosophy on body lotion is this – if the body lotion cannot be eaten, please don’t apply in on your body. That’s the main reason I use Shea butter. It’s edible for food and good as body lotion. What will you do as a consumer? Should you be stocking up for anticipated panic-buying and rationing of the commodities due to supplies in limited quantities?

In Spain, Italy and Turkey, the oil rationing is happening per reports. Meanwhile, biofuel use must be reconsidered in relation to edible cooking oil. How can Africa take advantage of this challenge and turn it into opportunity for the continent.  The African Continental Free Trade Agreements needs to start mapping out some strategies to support the ‘one market for Africa’.

Where do we get that blue-print? This one market must not be another talk-shop. Its results must be easily accessed and verified. What lessons are commodities markets offering us in this looming global market cooking-oil crisis? We support your international trade needs. Think FoReal HR Services.

Baptista is an influencer, a human resource professional with a broad generalist background. Building a team of efficient & effective workers is her business. Affecting lives is her calling!  She is a Hybrid Professional, HR Generalist, strategic planner, innovative, professional connector and a motivator. You can reach her via e-mail on [email protected]   You can follow this conversation on our social media pages Facebook / LinkedIn/ Twitter / Instagram: FoReal HR Services.   Call or WhatsApp: +233(0)262213313.  Follow the hashtag #theFutureofWorkCapsules #FoWC


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