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Indonesia to ban palm oil exports to tackle domestic shortage
JAKARTA: Indonesia will ban exports of palm oil starting next week, its president said Friday, as the world's biggest producer faces a shortage of cooking oil made from the product.
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.
"The government will prohibit the export of raw materials for cooking oil and cooking oil itself... until a deadline to be determined later," President Joko Widodo said in a statement.
"I will continue to monitor and evaluate the implementation of this policy so that cooking oil in the country is abundant at affordable prices."
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 Organisation.
- AFP
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Discussions
Be the first to like this. Showing 38 of 38 comments
Many of the Malaysian plantation companies have their business in Indonesia, right?
2022-04-23 13:18
Despite the ban the domestic price in indonesia will still remains high because of domestic shortage. So, it is still a handsome profit for indo planters.
Of course, without doubt pure msia planters will outperform those with some palm oil fields in indonesia.
2022-04-23 13:26
Why Malaysian government did not ban export of palm oil to tackle domestic cooking oil price hike and shortage?
A reasonable government should take care of it's local demand and welfare. It should not be operate like a leeching businessman.
The people should reject such irresponsible politicians.
2022-04-23 14:12
LOL. Only fools think that people will die due to shortage of palm oil.
Humans survived for hundreds of thousands of years without palm oil.
They continue living without palm oil, alternatives are plenty.
Cost will not be a matter.
2022-04-23 14:26
Posted by DickyMe > 16 minutes ago | Report Abuse
Why Malaysian government did not ban export of palm oil to tackle domestic cooking oil price hike and shortage?
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because msia government does not hv deep pocket to give up the 8% export duty on cpo. Now it is a perfect time for them to earn back whatever they spent on covid in last 2 years.
2022-04-23 14:30
Banning export shall flood the local Indonesian market with CPO and thus automatically drive local selling price for cooking oil , biodiesel and all consumer products containing palm oil to very low level. Jokowi is resolved to cushion the hardship face by his people due to hyperinflation and at tge same time reduce government subsidies in cooking oil and fuels. Such move , if it is prolonged is bad for plantations in Indonesia.
2022-04-23 15:43
The beneficiaries are 100% Malaysia based plantations such as Taann, SOp, swkpltn, MHC, cepat, HSplant, Kmloong etc.
Better stick to Malaysia based plantations . Indonesia frequent come with policy surprises and it’s no good for business.
2022-04-23 15:48
On the other hand, it will reduce export revenue and it's economy for Indonesia. For how long Indonesia can afford to continue with the export ban that remains to be seen.
2022-04-23 16:00
TSH has most of its land and four oil mills in Indonesia. I think it can take a back seat for the time being until the export ban is lifted.
2022-04-23 16:07
this calvintaneng really makes a lot of enemies from other stock forum. tat y this dick, plantationgameover and calviniswrong keep retaliate with nonsense :)
2022-04-23 17:48
I remember Calvin has advised some people to stop chasing/cut loss in some 'rubbish' counters right before it crashed sometime ago.
2022-04-23 19:08
Ban oil export mean no need to deliver to client anymore?
Yes Exporters can now declare a force majeure in a legal attempt to escape contractual liability and obligation by applying the elements of
(1) unforeseeable event,
(2) outside of the parties' control, that
(3) renders performance impossible or impractical
2022-04-23 21:37
We in our country also got shortage. Can U find the subsidised palm oil in plastic bags for sale in our supermarket ?
2022-04-23 22:48
I am a poor kampong kid, looking for the Rm2.50 per bag of 1 kg of palm oil to buy.
Where can I find it ?
2022-04-23 22:53
emember stick to good stocks which has only malaysian plantation exposure which are not affected by export ban which are;
1. Cepat
2. Hapseng
3. Kmloong
4. MHC
5. Taann
6. swkplant
7. Wtk
8. Bplant
2022-04-24 08:06
Ok to give u a good picture on palmoil ban by indonesia;
Indonesia producer can only sell domestically at Rm 3500 to Rm 4500 loh!
Their production cost is Rm 1500 to Rm 2000 loh!
Still making good profit but much less loh!
Msia producer can sell Rm 6500 to Rm 7500 mah!
Msian producers cost at Rm 2000 to Rm 2400, can make super abnormal profit loh!
2022-04-24 11:09
Besides WTK, Fima Corp and K.Fima and other stocks with oil palm plantations are not listed as plantations counters. Will they continue with the other plantation stocks uptrend from tomorrow that remains to be seen.
2022-04-24 11:54
FGV the most largest plantation giant but market cap only 7billion compare to KLK 30billion and IOI corp 30billion
Malaysia
416,697 Ha
2022-04-24 12:14
Will the West continue to raise the ESG and environment/global warming issue or protest is about to happen in other importing countries?
https://www.thestar.com.my/aseanplus/aseanplus-news/2022/04/23/indonesia-warned-palm-oil-export-ban-could-backfire-say-top-experts
2022-04-24 13:23
Yes western countries still use ESG to downplay palm oil but but due to super shortage they are quietly buy a lot. Malaysia March export palm oil showed that europe increase import 48% palm oil from Malaysia. They have no choice.
2022-04-24 14:57
Do you know why soybean oil price still at premium to Palm oil?
The western countries are using whatever it take to make sure they can sell their soybean oil at price higher than palm oil.
2022-04-24 15:15
No intention to shorten the Ukraine war but the gain from their weapons sales can still be used to compensate for the purchase of soybean oil and canola oil at record price? This maybe true I guess.
2022-04-24 16:42
Globally, palm oil supplies 40% of the world's vegetable oil demand on just under 6% of the land used to produce all vegetable oils.
The Western World out of their self interest come out with all unfound issues: health, sustainability, deforestation, ESG and etc to suppress palm oil because they know their seasonal vegatable oil crops were and are not competative compare to palm oil.
2022-04-24 18:33
This ban also impact some of our palm oil producers especially those with affected farms in Indonesia!
2022-04-25 00:09
Correctloh.....Cpo cash mkt up more than Rm 500 to more than Rm 7400 loh!
The future july up more than Rm 380 to more than Rm 6700 mah!
Very bullish price upgrade mah!
Big profit coming loh!
2022-04-25 13:03
Very Hot Loh!
Average CPO prices below:
Now July22 fut 6754
Q1 2022 6,197
Q4 2021 5,194
Q3 2021 4,466
Q2 2021 4,195
Q1 2021 3,938
Q4 2020 3,401
Q3 2020 2,783
Q2 2020 2,301
Q1 2020 2,673
Q4 2019 2,522
Q3 2019 2,053
Q2 2019 2,008
Q1 2019 2,089
2022-04-25 13:23
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2022-04-23 12:20