About three weeks after Russian troops invaded Ukraine, Indonesian housewife Liesye Setiana was forced to close her banana chip business as cooking oil supplies dried up across the country.
Millions of consumers and small business owners in the world’s fourth most populous nation have been rattled for months by skyrocketing cooking oil prices.
As the war between the two major grain and sunflower seed producers sent jitters through global markets, many producers rushed to shift their goods abroad to cash in on soaring rates.
Setiana would travel to a supermarket over an hour from her remote East Java village of Baruharjo to buy a daily eight-litre batch of palm oil that could keep her business alive.
But the 49-year-old mother of two would be turned away, with sellers heavily rationing the commodity used in products ranging from cosmetics to chocolate spreads.
“I was fuming and told the employees that I really need the cooking oil for personal use, not for hoarding,” said Setiana, who used to make up to 750,000 rupiah ($52) a day selling her savoury yellow snack.
“How come we have cooking oil shortages when Indonesia is the world’s top palm oil producer?”
Her battle for supplies is just a snapshot of the cooking oil crisis that has spurred hours-long queues of residents with jerry cans in hand across Indonesia’s most populous island, Java, and others such as Borneo.
Two people died in March from exhaustion — including one who had queued at three different supermarkets, according to local media — as they waited in searing heat to get their hands on a product that rose to 20,100 rupiah a litre at its height.
– Counting costs –
Indonesia produces about 60 percent of global palm oil supplies, with one-third consumed domestically. India, China, the European Union and Pakistan are among its major export customers.
The squeeze on cooking oil at home forced the Indonesian government to impose a now-lifted ban on exports last month, easing prices and shoring up domestic supplies.
But at the end of May, the price of bulk cooking oil, the most affordable in the country, still hovered at about 18,300 rupiah per litre on average, above the government’s target of 14,000 rupiah, according to official data.
The price spike has left many with difficult decisions to make.
Sutaryo, who like many Indonesians goes by one name, runs a tempe chip business out of his home in South Jakarta. He was forced to jack up his prices and lay off four employees to stay afloat.
“After the surge of cooking oil prices, we have to be smart in calculating our production cost. Our consumers are left with no other choice but to accept a higher price for our kripik tempe,” he said, referring to the traditional soy-based crackers.
With demand yet to recover, production at Sutaryo’s home factory has slid from 300 to 100 kilogrammes a day, and daily revenue is down to six million rupiah from 15 million before the pandemic.
About half-a-dozen workers cut thin slices of tempe before throwing them into frying pans of hot oil, letting them sizzle until crispy.
It is a far cry from the hustle and bustle of the business’s pre-pandemic peak, said Sutaryo, when he had workers frying tempe chips outside for lack of space.
– ‘Significant’ impact on poor –
Cooking oil prices were already on the rise in 2021, but the impact of Moscow’s assault has driven them to record highs, said Mohammad Faisal, executive director of the Center of Reform on Economics (CORE Indonesia) think tank.
The government is now moving to secure even more supplies at home, meaning there is unlikely to be a repeat of the spike seen after Russia’s invasion of Ukraine, he said.
But while prices may come down in Indonesia’s towns and cities, they will stay high for those living in rural and remote areas like Setiana.
“For lower-income people, the impact is significant because, at the same time, there are increases in the prices [of other commodities],” Faisal told AFP.
With local prices unlikely to fall, and with little money coming in since her husband was laid off, Setiana now has other worries — like no longer being able to afford school fees for her children.
“If prices of staple goods go up, we have little left for other expenses.”
Helium shortage deflates American celebrations
Helium balloons are part of nearly every American celebration, but a global shortage of the lighter-than-air gas has disrupted many traditions.
One college football team has suspended its traditional release of red balloons, and party planners will have to make do with less — if they get any.
“Due to the global helium shortage, we only allow 20 balloons to be ordered,” Litin’s Party Value, a party supplier in Minneapolis, Minnesota, warns on its website.
“We’ve had some customers pretty disappointed that they couldn’t get more,” Kristi Holmstrom, the chain’s general manager, told AFP.
“I’ve never seen it this bad before,” she said, adding that many stores have run out of helium entirely.
Whether it floats at the end of a string or grouped in a bouquet, shaped like a cartoon character, a number, or a Halloween pumpkin, helium balloons are a must.
Between the lost sales and the suspension of the helium rental business, Holmstrom estimates the shortfall to be between $5,000 and $10,000 a month.
The University of Nebraska football team, the Cornhuskers, will do without its traditional release of red balloons — the school color — before each home game this season.
“Acquiring helium … is really challenged and it’s been hard to get,” university athletic director Trev Alberts said in late May.
University officials asked “that the helium we are getting as a university we need to use for medical purposes” at the university’s medical center in Omaha,” he said.
The inert gas, a byproduct of natural gas production, is liquified to cool magnetic resonance imaging scanners (MRIS), was once deployed on space shuttle missions, and also is used in the manufacturing of semiconductors.
– ‘No store had helium’ –
Only a handful of countries — led by the United States — produce the gas, and the already-fragile supply chain has been disrupted by plant closures: in Texas over safety issues, in Russia after a fire (prior to the war in Ukraine), and in Qatar for maintenance.
Brad Weston, chief executive officer of Party City, said during an earnings call last month that the party supply chain has faced higher costs for helium, which cut about $2 million from gross profit in the first three months of the year and will inflict a bigger hit in the second quarter.
“The good news is we’ve secured helium to meet our customers’ needs,” ahead of the peak graduation season in May and June, he said of the retailer, which has 830 stores in North America.
The situation is even worse for the Dollar Tree discount chain.
“We are once again, experiencing shortages in availability of helium, and have not been able to procure the volume and the needs which will negatively affect balloon sales,” CEO Mike Witynski lamented late last month.
That’s small comfort for families trying to celebrate graduations, weddings and birthdays.
“Tried to get my baby some balloons for her graduation. No stores got helium,” Guy Fisher of Indiana said on Twitter.
– Priority for medical use –
Anna Bondareva, creator of the Wonder Party Rental agency outside of Washington, DC, along with her partner Laura Badmaev, said they are trying to find alternatives.
“I think it’s getting worse because it’s getting more expensive. It’s harder to get it,” Bondareva told AFP. “That should give us a chance to more creative to rethink our decorations.”
One client opted against using helium balloons for her 33rd birthday celebration due to the high cost. They no longer offer their customers this expensive option, and instead have focused on using balloons in other ways, including arches.
Even the National Weather Service has had to reduce the launch of balloons used for forecasting at a handful of its sites.
“Where needed, we reduced launches during clear weather to conserve the supply so we can launch in support of forecasts for bad weather days,” a spokeswoman said.
Uber and Waymo team up to get driverless trucks rolling
Uber and Google’s autonomous vehicle unit Waymo on Tuesday said they are joining forces to get driverless trucks hauling cargo on roads across the United States.
Due to the vast distances between American cities and with truck transport key to the economy, companies see self-driving as a way to cut costs and reduce risk.
Waymo will allow its technology to mesh with an Uber Freight platform that connects truckers with loads in a spin on how Uber lets people summon rides using smartphone apps.
“Uber Freight’s network of shippers, carriers, and marketplace technology is a great match for the Waymo Driver,” Waymo head of commercialization for trucking Charlie Jatt said in a statement.
Carriers that buy trucks equipped with Waymo systems will be able to opt in to having the vehicles deployed as “autonomous assets” on the Uber Freight network, the companies said.
The firms will also explore together the potential for creating hubs where cargo is easily handed off from self-driving trucks to human truckers.
“Both companies envision a future where autonomous trucks tackle the long-haul portion of driving, easing some of the burden of the increasing demand for freight while also enabling drivers to shift into short-haul jobs,” they said in the release.
Before driverless trucks are allowed onto roads and highways, however, multiple tests must still be conducted to ensure they are safe.
Waymo has been testing self-driving trucks in a handful of US states.
“Uber Freight’s extensive, efficient, and reliable digital network is essential to making autonomous trucks a reality,” said unit head Lior Ron.
The Freight unit has been steadily growing, according to quarterly earnings releases.
Yellen says new Biden investments can counter inflation
US Treasury Secretary Janet Yellen urged lawmakers to approve additional investments in renewable energy and higher taxes on the wealthy on Tuesday, as she defended the administration’s efforts to blunt the impact of inflation.
“I believe there’s lot that Congress can do to ease the cost burdens that households are experiencing,” Yellen told the Senate Finance Committee in the first of two days of testimony on President Joe Biden’s budget for the 2023 fiscal year.
Besides renewable energy investments — which Yellen said could help address high gasoline prices — the Treasury secretary backed more spending on affordable housing and efforts to rein in pharmaceutical prices.
She also highlighted the Biden administration’s historically large release of oil from the Strategic Petroleum Reserve to ease prices that drivers are facing at the pump, which have skyrocketed since the Russian invasion of Ukraine, hitting new records daily, with the national average at $4.92 a gallon Tuesday.
“Gas prices, while very high … would be higher without that,” Yellen said.
Yellen said the full-year 2022 inflation forecast is “likely to be higher” than the four percent initially projected. The forecast will be updated in the coming weeks, she said.
“Inflation is really an economic problem at this point, and it’s critical that we address it,” Yellen said, adding, “I do expect inflation to remain high, although I very much hope that it will be coming down now.”
The hearings come as Biden contends with a low favorability rating ahead of key midterm elections, with the pain from higher gasoline and food prices outweighing a strong job market and 3.6 percent unemployment.
Yellen was warmly received by Senate Democrats, but Republicans pointed to the administration’s energy and climate policies as a reason for the energy crunch and characterized Biden’s 2021 American Rescue Plan as a main reason for inflation.
“What I heard you say is that it is OK to raise taxes right now and that it is proper to have more stimulus spending to deal with this crisis,” said Senator Mike Crapo, a Republican representing Idaho.
“I just have to say I disagree with you on that.”
Yellen defended the American Rescue Plan, saying the administration took action in response to forecasts that unemployment could top nine percent given the headwinds amid the Covid-19 upheaval.
At the time, she said, “The overwhelming risk was that Americans would be scarred by a deep and long recession.”
Republicans also took Yellen to task for comments early 2021 characterizing inflationary pressures as “transitory,” the same word used early on by Federal Reserve Chair Jerome Powell.
Yellen said her remarks at the time did not foresee the supply chain problems that surfaced later in 2021, or the Russian invasion of Ukraine.
But Senator John Barrasso, Republican of Wyoming, said given Yellen’s past assurances, “it makes me wonder why Americans should put any confidence in your pronouncements and decisions and recommendations today.”
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