COLUMBIA – Indonesia, a top palm-oil exporter, banned exports beginning on Thursday. As an alternative to palm, soybean oil futures in the United States soared to the highest price on record for a third straight day.
A Columbia barbecue restaurant has already seen the increasing oil prices for the last six months.
“So the oil containers used to run us right around 22 to 25 a container. And now they’re closer to $40 a container. So that’s almost doubled,” Big Daddy’s BBQ manager Nan Jones said.
According to S&P Global, soybean oil prices in South America surged to historical highs, above the $1,900/metric ton mark for the first time amid a tight supply of edible oils.
However, the ban on palm oil is not the one thing leading to the soaring cooking oil prices.
Benjamin Brown, an MU Extension economist, said the drought during the summer of 2021 in the northern plains and the limitation of sunflower oil exports out of Ukraine because of the Russian invasion also led to the price increase.
In the United Kingdom, grocery stores have set limits on how many bottles of oil a person can buy. However, Brown said this limitation might not happen in the U.S.
“Our philosophy here in the United States for a long time has been that products are able to flow to whoever has the most money to spend on that product,” Brown said. “We use price as a signal. And price can be a limitation. So the price can get so high that people can’t afford to buy it.”
Big Daddy’s BBQ has not seen the oil supply shortage or limitation yet. However, they have already increased their food prices due to the increasing oil price.
“I would say at least 25%. I mean, the food cost has gone up. So the prices have gone up,” Jones said.