palm oil | Indonesia suspends all exports

(Jakarta) Indonesia on Thursday began imposing a full embargo on its palm oil exports, of which the country is the world’s largest producer, at the risk of destabilizing an already at its peak vegetable oil market.

Posted at 10:56 p.m

The Southeast Asian archipelago has faced shortages and rising prices for palm-based cooking oil in its domestic market for several months, fearing rising social tensions.

In a last-minute reversal Wednesday night, authorities clarified that the embargo would affect all exports of the oilseeds and not just products destined for cooking oils, as indicated a day earlier.

“All products,” including crude palm oil, “are subject to an ordinance from the Department of Commerce,” Coordinating Economy Minister Airlangga Hartarto said on Wednesday evening, specifying that the embargo would begin at midnight.

Indonesia’s President Joko Widodo emphasized on Wednesday evening that supplying the population has “top priority”.


Photo YVES HERMAN, Archive REUTERS

Indonesian President Joko Widodo

“Ironically, as the largest palm oil producer, we have a hard time getting cooking oil,” he admitted, calling on producers to work together.

The country is suffering from distribution problems while producers prefer to sell their stocks internationally to take full advantage of the price hike.

Jakarta plans to resume exports when the wholesale price of cooking oil in the archipelago falls to 14,000 rupees (97 cents) after rising 70% in recent weeks.

The supply of palm oil, the main oil used for cooking on the archipelago, has been problematic since the beginning of the year. The most humble consumers have had to wait for hours in front of subsidized oil distribution centers in many cities across the country.

Indonesia accounts for around 60% of global palm oil production, a third of which is consumed on the domestic market. The most important export customers include India, China, the European Union and Pakistan.

Palm oil is also an essential ingredient in the manufacture of a wide variety of products, from cosmetics to food.

Cooking oils had hit all-time highs back in March due to insufficient global supplies following Russia’s invasion of Ukraine, two major sunflower oil-producing countries.

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