Indonesia bans palm oil exports | news | DW
Indonesia on Friday announced a ban on palm oil exports in a bid to thwart the rising domestic prices of cooking oil.
Palm oil is the most widely produced, consumed and traded edible oil in the world.
The price of cooking oil has risen dramatically as a result of the Russian invasion of Ukraine. Both Ukraine and Russia are major exporters of sunflower oil.
What did the Indonesian authorities say about the ban?
“I will continue to monitor and evaluate the implementation of this policy so that the availability of cooking oil in the country is plentiful and at an affordable price,” Indonesian President Joko Widodo said in a statement.
The announcement came on the heels of a rally in Jakarta, where hundreds protested against rising oil and food prices.
Indonesia’s Finance Minister Sri Mulyani Indrawati told Reuters that Jakarta understood that the ban would hurt other countries, but stressed that it was necessary to reduce the domestic price of cooking oil as demand exceeded supplies.
Indrawati said the government had taken what amounted to one of the “toughest moves” possible after previous measures failed to stabilize prices.
Indonesia’s finance minister said households in the country are still unable to afford cooking oil after implementing export controls except for a total ban
The government of Indonesia had previously asked producers to hold stocks for domestic use, but this did not succeed in bringing prices down to a level that was affordable for households in the country. “It is still very expensive to buy these cooking oils for ordinary families,” the Indonesian finance minister said.
“We know this is not going to be the best outcome,” Indrawati said. “If we’re not going to export, that’s definitely going to hit other countries.”
Why are Indonesian palm oil exports important?
China and India are major importers of Indonesian palm oil. Indonesia is the largest oil producer and accounts for more than half of the world’s supply. Neighboring Malaysia is the second largest producer in the world.
Palm oil is used in cooking oils, processed foods, cleaning products, cosmetics, biofuels, and other products.
At meetings of the International Monetary Fund and the World Bank this week in Washington, policymakers expressed concern about potential food shortages due to the war in Ukraine. World Bank President David Malpass urged countries to avoid hoarding food stocks or implementing export controls.
About 77 million metric tons of palm oil is expected to be produced this year, according to the US Department of Agriculture.
Global palm oil production actually declined during the first two years of the COVID-19 pandemic due to reduced migrant labor on plantations in Southeast Asia.
Other edible oils also saw a decline in exports. Argentina, a major soybean oil producer, is expected to ship less oil this year after a poor end to the soybean growing season and in 2021 a drought devastated Canada’s canola crop.
sdi/msh (AP, Reuters)