05/23/2022, 13.34
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Indonesia lifts palm oil export ban

by Mathias Hariyadi

As a form of protest, farmers were letting the crop rot. Indonesia lost about US$ 3 billion in uncollected duties. Now domestic prices are expected to rise again, undermining President Joko Widodo’s popularity.

Jakarta (AsiaNews) – The Indonesian palm oil saga ended today with the government lifting the export ban it imposed last month.

“Considering the current supply and prices of cooking oil and 17 million people in the industry, I have decided that exports will resume on Monday, May 23, 2022,” President Joko Widodo said last week.

“Based on direct field checks and reports I received, thank God, the supply of bulk cooking oil has increased, exceeding our national needs,” he added.

When Jokowi imposed the protectionist measure in April, he was immediately met with criticism from local farmers and businesses; as a result, many farmers stopped harvesting, letting the crop rot.

With U-turn, people are excited. “I thank the president for ending the export ban. Our economic wheels can now turn again,” said Manusetus Darto, secretary general of the Palm Oil Farmers Union (SPKS).

The government banned exports in response to rising domestic prices for cooking oil, a staple food in the most populous country in Southeast Asia.

In doing so however, exporters saw their revenues reduced, while Indonesia lost up to US$ 3 billion in uncollected duties since April.

India, a major palm oil importer that relied on Indonesia for a supply of around 700,000 tonnes per month, immediately turned to Malaysia, the second largest world producer.

Focusing on exports risks further limiting the population's purchasing power, analysts warn. What is more, rising domestic prices have affected the president’s popularity.

Recently, the price of palm oil has remained stable around 17,000 Indonesian rupiah (US$ 1.61 dollars) per litre, slightly up from 14,000 rupiah (US$ 0.95) in previous weeks.

Raw palm oil products account for 12.5 per cent ​​of Indonesia's revenue, while 80 per cent of production is exported.

The decision to lift the ban was done in agreement with at least 30 UN member states after a meeting on global food security, which has been seriously compromised by Russia’s invasion of Ukraine.

About 80 per cent of world sunflower oil exports come from the two warrying countries. Sunflower oil is a substitute for palm oil in cooking.

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