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.
“Jokowi,” as the president is popularly known, according to Reuters, made the announcement via a video broadcast Friday, saying the policy aimed to ensure the 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.
According to Nikkei Asia, cooking oil is heavily used in local dishes in Indonesia and comes mainly from palm oil, the country’s top export commodity. Its prices have soared since late last year, and have hiked further amid supply disruptions of edible oils due to Russia’s invasion of Ukraine.
The price hikes have resulted in cooking oil disappearing from store shelves in Indonesia, and while there has been a very slight improvement in the last few weeks, the prices are still very high – nearly double the amount several months ago, fueling inflation concerns amid the festivity of the Islamic fasting month of Ramadan.
Indonesia imposed a similar blanket ban on coal exports temporarily in January after high international prices of the commodity lured local coal producers to export their outputs and abandoned a separate Domestic Market Obligation (DMO) policy whereby coal miners must supply 25 percent of annual production to state utility Perusahaan Listrik Negara (PLN) at a maximum price of $70 per ton, well below current market prices.
Since 2018, Indonesia has stopped issuing new permits for palm oil plantations, often blamed for deforestation and destroying habitats of endangered animals such as orangutans.
