Indonesia also banned crude, refined palm oil exports in reversal of policy


Indonesia has also banned the export of crude and refined palm oil.

Jakarta:

Indonesia widened the scope of its export ban on crude to include crude and refined palm oil, its chief economic minister said on Wednesday, leaving markets in shock over the latest policy reversal.

The announcement reversed the minister’s statement a day earlier, in which he had said the export ban would only cover refined, bleached and deodorized palm olein.

The change was “in line with the decision of the President and taking into account the feedback and views of the people,” Airelanga Harterto said in a brief statement.

President Joko Widodo said in a separate statement that people’s need for affordable food has eased revenue concerns for now.

“Once the domestic needs are met, of course I will lift the export restrictions because I know the country needs taxes, foreign exchange, … balance trade surplus, but to meet the basic needs of the people. There is a more important priority,” he said.

Jokowi, as the president is popularly known, said Indonesia has enough capacity to meet domestic demand and it is “ironically” that the country is facing a shortage of cooking oil.

The ban preceded a stir in the palm oil market and Indonesia deployed naval ships and personnel in an attempt to thwart illegal shipments.

Navy spokesman Julius Widjojono said the new rules were due to take effect from midnight (1700 GMT) local time, and instructed the Navy and other agencies to increase patrols of Indonesian waters to ensure compliance.

Palm oil futures on the Malaysia Exchange rose 9.8 percent on Wednesday, as some market participants feared exporters in Indonesia, the world’s largest palm oil producer, may not get their products on ships before sanctions begin.

US soya oil futures jumped over 4 per cent to hit record highs after Indonesia banned the induction of CPOs.

“astonished”

It was not clear whether palm oil companies were informed of the latest policy change.

Industry sources and traders, who requested anonymity due to the sensitivity of the issue, said they were shocked by the latest development.

“This is a drastic measure to rein in the prices and we expect it to have the expected impact in the short run and not hurt the industry,” said a palm industry source.

“It’s crazy. We’re paying a price for Indonesia policy flip-flops. Every vegetable oil is going through the roof. Securing any vegetable oil supply for May shipments is a challenge,” said a global leader. With New Delhi based dealer said trading firm.

A trade ministry regulation issued on Wednesday said exporters who have received customs declaration by April 27, latest by April 27, can still ship their products.

The export ban will be reviewed monthly or as often as needed, the regulation added.

Eddie Martono, general secretary of the Indonesia Palm Oil Association (GAPKI), said earlier on Wednesday that the industry was trying to “operate as usual while continuing to monitor market developments”.

Eddie said that with such a short notice on the ban, first announced on Friday evening by President Joko Widodo, there was no way for exporters to pull out their products.

“It is impossible to get a ship right away, everything would have been chartered,” he said.

Indonesia’s sanctions have pushed up global edible oil prices as supplies were already stalled by factors such as drought and shortages following Russia’s invasion of Ukraine, a major crop producer.

Indonesia’s ban on palm oil exports is unlikely to last more than a month, due to limited infrastructure to store the surplus oil and increasing pressure from buyers, industry officials said. said.

stubbornly high prices

Airlunga said the ban would remain in place until wholesale cooking oil prices fell to Rs 14,000 ($0.9720) per liter.

In Jakarta, wholesale cooking oil prices were offered at around Rs 19,000-20,000 (1.32-$1.39) on Wednesday and prices could be higher in other regions, said Renaldi Sarijovan, a senior official at the Traditional Market Traders Association. Huh.

In Riau province on the island of Sumatra, smallholder farmers have already seen a sharp drop in the price of palm oil fruit due to export restrictions, local planters said, and they fear palm oil companies will stop buying from independent farmers. Will give

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