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First with the News

Indonesia Set To Ban Palm Oil Exportation To Tackle Domestic Shortage

April 22, 2022
in Top Stories, World
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By Ebi Kesiena

In a bid to tackle domestic shortage, Indonesia is set to ban exports of palm oil starting next week, its president said on Friday, as the world’s biggest producer faces a shortage of cooking oil made from the product.

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The Southeast Asian archipelago has been running low on palm-based cooking oil since November as producers turn to exports to cash in on an increase in prices around the world.

Authorities now fear the scarcity and soaring prices could provoke social tensions and have moved to secure supplies.

President Joko Widodo stated in a statement that the government will prohibit the export of raw materials for cooking oil and cooking oil itself until a deadline to be determined later.

“I will continue to monitor and evaluate the implementation of this policy so that cooking oil in the country is abundant at affordable prices,” he stated.

Officials introduced limited curbs on palm oil exports in January, capped prices, and announced cash subsidies for some Indonesians to compensate for rising food prices.

But the commodity continued to become harder to find at markets and grocery stores, with long queues appearing at many locations.

This week the Attorney General’s Office accused an official in the trade ministry of corruption for issuing export permits to palm oil producers when they had not met domestic market obligations.

The office also arrested several high-ranking officials at three of Indonesia’s big palm oil companies, including Wilmar Nabati Indonesia, a subsidiary of Singapore-based giant Wilmar International.

Palm oil is the most widely used vegetable oil in Indonesia whereas crude palm oil is exported worldwide for a wide range of uses, from cosmetics to chocolate spread.

Vegetable oils are among a number of staple food items that have reached all-time high prices in recent weeks following Russia’s invasion of agricultural powerhouse Ukraine, according to the United Nations Food and Agriculture Organization.

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