Indonesia’s Jokowi to ban palm oil exports in effort to curb domestic prices
- Indonesia supplies half the world’s palm oil, which is the most consumed oil globally; its biggest buyer is India
- Demonstrations by students have taken place in several cities across Indonesia in recent days over high cooking oil prices
Indonesia will effectively ban palm oil exports from April 28, until further notice, after President Joko Widodo on Friday announced a halting of shipments of cooking oil and its raw material to control soaring domestic prices.
In a video broadcast, Jokowi, as the president is popularly known, said the policy is aimed at ensuring availability of food products at home. “I will monitor and evaluate the implementation of this policy so availability of cooking oil in the domestic market becomes abundant and affordable,” he said.
US soy oil futures jumped more than 3 per cent to a record high of 84.03 cents per pound after Indonesia announced the ban.
The move will hurt consumers not only in biggest buyer India but globally, as palm is the world’s most consumed oil, Atul Chaturvedi, president of trade body the Solvent Extractors Association of India (SEA), told Reuters.
“This move is rather unfortunate and totally unexpected,” he said.
Global prices of crude palm oil, which Indonesia uses for cooking oil, have surged to historic highs this year amid rising demand and weak output from top producers Indonesia and Malaysia, plus a previous move by Indonesia to restrict palm oil exports in January that was later lifted in March.