Palm oil exports could resume in May, says Indonesia

Indonesia should be able to lift an export ban on palm oil and its refined products in May, an industry body said.

Indonesia has begun to impose an outright ban on palm oil exports as the world’s largest producer of the commodity risks destabilizing a world market for vegetable oil that is already hitting record prices.

Authorities in the most populous country in Southeast Asia fear that shortages and rising costs could spark social tensions and have moved to secure supplies of the product, which is used in a variety of products such as chocolate creams and cosmetics.

The Indonesian authorities hope to be able to deal with the shortage of cooking oil in the coming weeks.

Sahat Sinaga, a senior official with the Indonesian Palm Oil Board, said the decision had shocked the industry, but he was confident the supply issue could be resolved by early May, after the Muslim holiday of Eid al-Fitr. .

“It will be a big hit. It won’t take long. After Eid, the market will be flooded,” he said.

A commerce ministry regulation said the export policy would be reviewed monthly, or as often as needed, while Chief Economy Minister Airlangga Hartarto said it could be lifted when bulk cooking oil falls back to Rs14,000 (0 .92 euros) per liter throughout the country.

Earlier, Indonesian authorities clarified that the embargo would include all oilseed exports and not just products destined for edible oils, as indicated a day earlier.

“All products,” including crude palm oil, “are covered by regulation from the Ministry of Commerce and will be enforced,” Hartarto said.

President Joko Widodo said supplying the country’s 270 million people was the “top priority” of his government.

“As the world’s largest producer of palm oil, it is ironic that we are having difficulty obtaining cooking oil,” he said.

Palm oil is used to make chocolate creams (file photo)

Indonesia produces about 60% of the world’s palm oil, with a third consumed by its domestic market. India, China, the European Union and Pakistan are among its main export clients.

The islands of Southeast Asia, mostly belonging to Indonesia, collectively rank second in terms of forest destruction since 2002, with much of that forest cleared for palm oil plantations.

The shortage of months has been exacerbated by poor regulation and growers’ reluctance to sell at home due to high international prices that have made exports more profitable.

Jakarta plans to resume exports when the price of bulk cooking oil in local markets has fallen to Rs14,000 (92 cents) per litre, after rising 70% in recent weeks to Rs26,000 (€1.71). .

Plantation workers in Pekanbaru transfer palm fruits to be converted into crude palm oil

Vegetable oils are among a number of food staples whose prices have hit record highs in recent weeks, following Russia’s invasion of agricultural powerhouse Ukraine, according to the Food and Agriculture Organization of the United Nations.

The supply of palm oil has been problematic since the beginning of the year, with people often spending hours in long queues at distribution centers to obtain it.

For Ade Neni, who sells popular fried snacks called gorengan, the ban has been a huge blow to business.

“High oil prices have reduced my sales,” he said. “I had to increase the price of my gorengan.”

Eddy Hartono, head of the Indonesian Palm Oil Producers Association, said the new measures have already caused plantation farmers’ incomes to plummet.

“There is no problem of supply, but of distribution,” he said.

Public discontent with rising food prices has contributed to President Widodo’s falling popularity, according to recent polls, and has sparked protests in several cities.

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