<\/p>\n
News:\u00a0 <\/span><\/b>Recently,<\/span> Indonesia, the <\/span>world\u2019s largest producer<\/span><\/b> and <\/span>exporter<\/span><\/b> of the palm oil has been experiencing domestic shortages of the same. This led to spike in the domestic palm oil prices in Indonesia and the world (including India). Therefore, Indonesia has announced to ban all exports.\u00a0<\/span>\u00a0<\/span><\/p>\n In a hyper-globalised world, countries produce things in which they have<\/span> comparative advantage<\/span><\/b> and import those others can make at lower opportunity cost.\u00a0<\/span>\u00a0<\/span><\/p>\n For example, Indonesia and Malaysia produce <\/span>palm oil<\/span><\/b>; and Ukraine and Russia produce <\/span>sunflower oil<\/span><\/b>. They have comparative advantages in the palm oil and sunflower oil. Therefore, Indonesia alone is the largest exporter of palm oil.\u00a0<\/span>\u00a0<\/span><\/p>\n It leads to <\/span>too much dependence<\/span><\/b> on supplies from one or two countries. For example, palm oil, which accounts for roughly 40% of India\u2019s annual vegetable oil consumption, is almost entirely imported from <\/span>Indonesia <\/span><\/b>and <\/span>Malaysia<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n This can lead to supply disruption in case of crisis. For example, In wake of the Russia-Ukraine war, the supply of sunflower oil has been disrupted.\u00a0<\/span>\u00a0<\/span><\/p>\n In fact, <\/span>high international crude prices<\/span><\/b> have led to diversion of <\/span>palm<\/span><\/b> and <\/span>soyabean oil<\/span><\/b> for making bio-diesel.\u00a0<\/span>\u00a0<\/span><\/p>\n The <\/span>disruption<\/span><\/b> in the <\/span>supply<\/span><\/b> of commodities impacts the prices of the other commodities. For example, At present, palm oil prices are causing strain in the prices of vanaspati, margarine, bread, biscuits, noodles, frozen dessert, namkeens, mithai, soap and cosmetics etc.<\/span>\u00a0<\/span><\/p>\n Hyper-globalisation<\/span><\/b> and leveraging <\/span>comparative advantage<\/span><\/b> work well in a world without <\/span>geopolitical frictions <\/span><\/b>or <\/span>natural disasters<\/span><\/b>. For example, 2011 Thailand floods impacted the computer hard drive supply chain.\u00a0<\/span>\u00a0<\/span><\/p>\n In the real world, countries need to <\/span>de-risk<\/span><\/b> against <\/span>overdependence<\/span><\/b> on few suppliers, especially of products entailing heavy foreign exchange outgo.\u00a0<\/span>\u00a0<\/span><\/p>\n The Indian government needs to <\/span>reduce dependence<\/span><\/b> on import of edible oils from the current 60-65%.\u00a0<\/span>\u00a0<\/span><\/p>\n Domestic producers can be given <\/span>one-time capital subsidy<\/span><\/b> and <\/span>tariff support<\/span><\/b> based on long-term import <\/span>parity pricing.<\/span><\/b>\u00a0<\/span>\u00a0<\/span><\/p>\n There are <\/span>collateral benefits<\/span><\/b>, too, from some paddy and wheat acreage getting diverted to oil palm or mustard.<\/span><\/p>\n Source<\/span><\/b>: The post is based on the article \u201cUkraine rethinks on hyper globalisation. Nations need to de-risk against overdependence on few suppliers<\/strong>\u201d published in the Indian Express<\/strong> on 2<\/strong><\/span>nd<\/strong> May 2022<\/strong>.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" News:\u00a0 Recently, Indonesia, the world\u2019s largest producer and exporter of the palm oil has been experiencing domestic shortages of the same. This led to spike in the domestic palm oil prices in Indonesia and the world (including India). Therefore, Indonesia has announced to ban all exports.\u00a0\u00a0 What is the concept of hyper-globalization?\u00a0 In a hyper-globalised… Continue reading Ukraine rethinks on hyper-globalisation. Nations need to de-risk against overdependence on few suppliers\u00a0<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10500],"class_list":["post-182357","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1700325856},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/182357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=182357"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/182357\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=182357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=182357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=182357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}What is the concept of hyper-globalization?<\/span><\/b>\u00a0<\/span><\/h5>\n
What are the issues in hyper-globalization?<\/span><\/b>\u00a0<\/span><\/h5>\n
Way Forward<\/span><\/b>\u00a0<\/span><\/h5>\n