Functional Ingredient Suppliers Impacted by Indonesian Palm Oil Export Ban

Suppliers selling functional ingredients derived from palm oil are expecting pressures around working capital and lead time, with Indonesia’s palm oil export ban tightening supplies and pushing prices up, reports the Nutraingredients-Asia on May 09.  While the policy has largely impacted the general food and cooking oil industry, the nutraceutical industry is also not spared from the ban, as ingredients such as tocotrienols, carotenes, medium chain triglycerides (MCT), and glycerin are derived from the different parts of the oil palm fruit, the report added.

Speaking to functional ingredient suppliers, like Singapore-based Musim Mas and Malaysia-based Excelvite and PhytoGaia, Nutraingredients-Asia listed some points brought up resulting from the ban such as price escalation of starting materials due to supply tightness, the possibility of change of payment terms with palm oil suppliers asking for prepayment to avoid defaults, longer lead time due to supply shortage, as well as the overall rise in prices of functional ingredients.