May 2, 2022
(press release)
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Following the news that Indonesia’s ban on palm oil exports will further disrupt the supply chain operations of health & beauty manufacturers and cause price rises; Lia Neophytou, Senior Health & Beauty Analyst at GlobalData, a leading data and analytics company, offers her view: “Health & beauty manufacturers have already increased prices to offset the rising cost of palm oil in the last year but a dwindling supply of the commodity due to the export ban will cause further price increases and prompt consumers to trade down to more affordable alternatives in the coming months. According to a GlobalData survey conducted earlier this month, a quarter of UK consumers said they expect to buy cheaper health & beauty products this year due to rising prices. This proportion will likely increase as key players including Unilever anticipate further cost inflation and price increases throughout the year. “This ban will affect most health & beauty manufacturers, even those that had previously shifted away from palm oil for sustainability reasons, as the cost of other oils used for their moisturizing properties subsequently increases. Manufacturers will be hoping the ban is short-term and that available stocks, supplies from other markets, and sourcing alternative oils will support production. However, once further price increases occur and consumers trade down to cheaper alternatives, it will be difficult to win them back again amid the current cost-of-living crisis.” * Data taken from GlobalData’s survey of 2,000 nationally representative
UK consumers, aged 16+ conducted in April 2022
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