(Maekyung DB)
News
gla_wpadmin  

Sajo Daelim, Daesang Holdings stock price soaring Why? Food stocks surge on news of halting palm oil exports to Indonesia

(Maekyung DB)

From April 28, Indonesia will completely stop exporting palm (oil palm) oil. Indonesia is the world’s largest palm oil producer. About 56% of domestic companies import palm oil from Indonesia. Palm oil is used as a raw material for cosmetics and detergents. In addition, as it is widely used in processed foods such as ramen (yutangmyeon) and sweets, if the export of palm oil to Indonesia is halted, food prices are inevitably rising. As a result, food-related stock prices rose all at once.

As of 11:42 am on April 25, the stock price of Sajo Daerim was 39,250 won, up 21.89% from the previous day. The stock price of Sajo Daerim soared to 41,400 won at the beginning of the market. At the same time, other food-related stocks, such as Sempyo Foods (11.61%), Daesang Holdings (13.08%), Ottogi (1.82%), and CJ Cheiljedang (1.94%), are also strong.

Due to the prolonged war between Ukraine and Russia, international palm oil prices soared more than 40% this year. As the price of palm oil rose, Indonesian producers concentrated on exports, causing the price of palm oil in Indonesia to surge and a shortage occurred. The Indonesian government came up with measures to overcome the palm oil crisis, but to no avail, eventually decided to suspend exports to normalize the domestic market.

If Indonesia’s palm oil imports stop, there are growing concerns that ramen and confectionery companies, which use palm oil the most, will be particularly problematic. In particular, ramen is expected to have a big impact as most of it uses edible palm oil. In the case of food, it is not easy to use substitutes because the taste varies depending on the type of cooking oil used.

The food industry usually stocks about three months’ worth of palm oil, but if the situation continues for a long time, production disruptions and price increases due to supply exhaustion cannot be ruled out. A Lotte Food official said, “There is no problem in the immediate supply and demand of palm oil, but if the supply of palm oil from Indonesia is cut off, demand for palm oil from Malaysia or the Philippines will be driven into substitutes, so it could lead to a price increase in the long term.”

The impact of Indonesia’s suspension of palm oil exports is also expected to have an impact on the cosmetics industry. This is because palm oil is used as a raw material for cosmetics such as various creams and lotions along with soap and cleansing foam. An Amorepacific official said, “We are monitoring the announcement of Indonesia’s palm oil export ban and are reviewing countermeasures.”

[고혜영 인턴기자]

[ⓒ 매일경제 & mk.co.kr, 무단전재 및 재배포 금지]

Reference-www.mk.co.kr

Leave A Comment