Indonesia’s President announces ending palm oil export ban from Monday
JAKARTA (Reuters) – Indonesia will lift its three-week-old palm oil export ban from Monday as an improvement in its domestic cooking oil supply, its president said, amid growing calls to lift it lauded by farmers One Step.
On April 28 the world’s top palm oil exporter halted shipments of crude palm oil and some derivative products to overcome rising domestic cooking oil prices, surprising markets that were already troubled by government intervention measures. .
President Joko Widodo said on Thursday that the supply of bulk cooking oil has now exceeded the requirement, although wholesale prices are yet to come down to the targeted Rs 14,000 per litre.
“In many areas I know that cooking oil prices were still relatively high, but I believe they will be more affordable in the coming weeks,” Jokowi, as president, said in a video statement. said.
Industry groups have warned that the palm oil sector could come to a standstill in the coming weeks if export restrictions continue.
He said the government was considering the welfare of 17 million workers while taking the decision.
“While exports are being reopened, the government will continue to monitor and monitor (market) to ensure that demand is being met with affordable prices,” Jokowi said.
The benchmark contract for palm oil in Malaysia closed 0.98% lower and was expected to fall further after Indonesia’s announcement.
Members of Parliament’s budget committee had earlier urged the Finance Minister Mr. Mulyani Indravati to ask the government to evaluate the export restrictions.
The embargo came as global vegetable oil markets were grappling with a supply crunch in sunflower oil from the war in Ukraine.
Palm oil comprises a third of the world’s vegetable oil market, with Indonesia accounting for about 60% of the supply.
Despite a ban on cooking oil to address domestic discontent, pressure has mounted to reduce it as Indonesian farmers see demand for their palm fruits plummet.
Earlier this week, farmers held a rally over the export ban as palm fruit prices fell across the country.
Responding to Jokowi’s announcement, the palm oil farmers’ union SPKS said they hoped plantation activities “will return to normal and farmers’ economic conditions will improve”.
Sahat Sinaga, executive director of the Indonesia Vegetable Oil Industry Association, told Reuters that Indonesia has about 6 million tonnes of storage capacity, including at ports, and that domestic stocks reached about 5.8 million tonnes in early May.
Large plantation companies began to lengthen their harvest intervals because of the uncertainty surrounding the sale of their produce, while smaller farmers queued for days at palm oil mills trying to sell their fruits.
“The actual conditions in the area are very difficult as the tanks began to fill up,” said Eddie Martono, general secretary of the Indonesia Palm Oil Association.
“Hopefully, with the reopening of exports, palm oil production can resume.”