Jakarta:
Indonesia will lift its ban on palm oil exports next week, President Joko Widodo said on Thursday, easing pressure on the global vegetable oil market after prices surged following the suspension and the war in Ukraine.
The archipelago issued a ban last month to secure supplies of the raw material used in a range of goods from chocolate spread to cosmetics in the face of a domestic shortage.
“Based on the supply… of cooking oil and given that there are 17 million people in the palm oil industry – farmers and other supporting workers – I have decided that cooking oil exports will reopen on Monday, May 23,” he said. Widodo at an online briefing.
“The government will still strictly control everything to ensure that demand is met with affordable prices,” he said.
Authorities had strictly enforced the export ban, with the Indonesian navy earlier this month seizing a tanker carrying palm oil out of the country, in violation of the order.
After the ban went into effect, Widodo said supplying the country’s 270 million residents was his government’s “top priority.”
Jakarta came under pressure from further saddle prices that had already skyrocketed following Russia’s invasion of agrarian powerhouse Ukraine.
Palm oil producers protested in central Jakarta and several cities in Indonesia last week, complaining that palm oil fruit prices had fallen dramatically.
‘Back to normal’
The Indonesian leader said he was lifting the suspension because the domestic supply and price of cooking oil had improved since the ban came into effect on April 28.
Widodo said prices had fallen from 19,800 rupiah ($1.35) per liter to about 17,200 rupiah ($1.17) since the ban.
Domestic supplies of cooking oil also tripled after the ban from 64,500 tons per month to 211,000 tons, he said.
Industry figures applauded the decision to resume exports.
Eddy Martono, secretary general of the Indonesian Palm Oil Association (GAPKI), said the organization is very grateful to “the government, especially the president” for lifting the ban.
“The fact is that the situation on the ground is very difficult because the tanks have all been full. We hope that with the reopening of exports, palm oil production can return to normal.”
Oil Palm Farmers Association president Gulat Manurung thanked Widodo and said palm oil farmers would repay his decision by increasing domestic supplies.
“We oil palm farmers promise to help ensure domestic supplies of cooking oil will be available,” he told AFP.
Palm oil is the most widely used vegetable oil in Indonesia and despite being the largest producer in the world, the country has been struggling for months with a shortage of cooking oil due to poor regulations and producers who are reluctant to sell at home.
The shortages have in some cases forced consumers to queue for hours at distribution centers.
Indonesia produces about 60 percent of the world’s palm oil, a third of which is consumed by the domestic market. India, China, the European Union and Pakistan are among the main export customers.
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