Biofuel demand makes fried food expensive in Indonesia

Record-high palm oil prices due to voracious global demand for the oil used for food and now increasingly as a biofuel have left many ordinary Indonesians without their usual culinary fare.

Palm oil-derived cooking oil is a staple in the Indonesian pantry. It is used to fry many of the spicy dishes that are part of the local cuisine.

But the high price of oil has forced millions of poor Indonesians to eat their food boiled instead of fried.
“I only have fried tempe when I have money, but mostly I don’t,” said Nurhayati, a mother of five, referring to a traditional dish made from fermented soya beans.

“So my family just eats rice … and soy sauce,” she added as she scrubbed pots in a house where she works as a maid earning 300,000 rupiah ($33) a month.

In a country where about half the 220 million population live on less than $2 a day, the rising price of cooking oil is a national talking point sensitive enough to make politicians break into a sweat.

Long queues of people waiting to buy cooking oil — empty plastic containers in hand — could recently be seen in markets, a scene reminiscent of the financial crisis in the late 1990s that brought down the rule of strongman former President Suharto.

Two years ahead of the next election, President Susilo Bambang Yudhoyono has come under pressure for his record on tackling the impact of rising commodity prices on local staples after promising to slash poverty.

“It’s a warning for the government,” said Ganjar Pranowo, an opposition parliamentarian.

Palm oil prices have been driven up by rising demand for biofuel in Europe and strong demand from food sectors in countries such as fast-growing India.

As one of the world’s largest palm oil producers, Indonesia stands to gain from the price hike, but the rise has also pushed up local cooking oil prices by about a third, making such oil unaffordable for millions of ordinary Indonesians.

Scientific American