`Indonesia to Suspend All Cooking Oil Exports - Olive Oil Times
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Indonesia to Suspend All Cooking Oil Exports

By Simon Roots
May. 4, 2022 16:20 UTC

Indonesian President Joko Widodo has announced a com­plete sus­pen­sion of all cook­ing oil exports until fur­ther notice, cit­ing the need to secure domes­tic sup­plies. 

The mea­sures are to take effect on Thursday, May 5, although a num­ber of mod­i­fi­ca­tions to the scope of the ban have already been made.

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“Indonesia will sus­pend exports of cook­ing oil, and the raw mate­ri­als used to make it, until fur­ther notice… to ensure domes­tic avail­abil­ity of cook­ing oil” and to help keep it afford­able fol­low­ing sig­nif­i­cant increases dur­ing March, Widodo said.

At a press brief­ing, Airlangga Hartarto, the coor­di­nat­ing min­is­ter for the econ­omy, added: ​“The pres­i­dent is com­mit­ted to mak­ing the Indonesian peo­ple the first pri­or­ity in gov­ern­ment poli­cies. This pol­icy is intended to ensure that all CPO prod­ucts are ded­i­cated entirely for [the] avail­abil­ity of bulk cook­ing palm oil at a price of 14,000 rupiah (€0.92) per liter.”

According to media reports, the announce­ment imme­di­ately caused com­mod­ity prices to rebound dra­mat­i­cally, and crude palm oil futures in Malaysia, the sec­ond-largest palm oil pro­ducer glob­ally, shot up by almost 7 per­cent. 

This ten­sion sub­sided shortly after the announce­ment that the gov­ern­ment would exempt crude palm oil from the export restric­tions.

Given the ongo­ing war in Ukraine and the sub­se­quently reduced avail­abil­ity of sun­flower and cereal oil, the with­drawal of the world’s lead­ing palm oil pro­ducer is expected to lead to greater ten­sion in the veg­etable oil mar­ket, with a con­se­quent increase in both demand and prices for other alter­na­tive oils. 

This will be com­pounded by other neg­a­tive fac­tors for the global edi­ble oil trade, such as droughts in South America and Canada, which have also lim­ited soy­bean and canola oil sup­plies, respec­tively.

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