With Indonesia resuming palm oil exports on Monday after a three-week embargo, industrialists and companies awaited detailed regulations to protect domestic supplies of edible oil to control cooking oil prices.
As the Southeast Asian nation, the world’s largest producer of palm oil, cut off palm oil exports from April 28 in a bid to bring down local cooking oil prices, global edible oil markets are already battling a shortage of sunflower oil due to the war. Ukraine.
President Joko Widodo last week announced the lifting of the ban on exports of crude palm oil and some derivatives products, expressing confidence that the price of bulk cooking oil is moving towards the target of Rs 14,000 per liter ($ 0.9546), even if they are currently higher. In some areas.
Palm oil, used in everything from margarine to shampoo, makes up about one-third of the world’s vegetable oil market, accounting for about 60 percent of Indonesia’s supply.
To ensure supply security, Indonesia has said it will impose a so-called domestic market obligation (DMO) policy, requiring producers to sell a portion of their products locally at a certain price level.
Indonesia plans to keep a supply of 10 million tonnes of cooking oil at home under the DMO rules, Chief Economy Minister Erlanga Hartarto said, adding that their implementation would be regulated by the Ministry of Commerce.
Traders were waiting for the details of the DMO and other rules to be released on Monday.
“Vendors are first trying to clear the pending quantity that was stuck due to the ban. They are also accepting new orders, but the demand is not very high,” said a dealer at a Mumbai-based global trading house.
“They are not interested in selling too much before they understand the DMO rules,” the trader added.
Palm oil futures rose 1.67 percent on Monday from rival supplier Malaysia, partly reflecting Indonesia’s policy uncertainty.
Asked if palm oil producer Musim Mas had resumed exports, spokeswoman Caroline Lim said the company was still “focusing on flooding the domestic market with cooking oil to reach the target retail price”, noting that the Indonesian government was still concerned about higher retail prices. .
As of Friday, the average price of bulk cooking oil was Rs 17,000 per liter, according to Commerce Ministry data.
Some farmers, however, have expressed joy at the lifting of the export ban.
Last week, farmers rallied across Indonesia to protest a 70% reduction in palm oil prices as refineries stopped receiving supplies due to overfilling of palm oil reserves.
“There are no longer long lines at palm oil mills,” said Irfan, a palm oil farmer who said prices of palm fruit in his western Sulawesi area had begun to stabilize.
(Except for the title, this story was not edited by NDTV staff and was published from a syndicated feed.)