Jakarta, CNBC Indonesia – The Indonesian government will reportedly tighten palm oil export regulations starting January 1, 2023. Overseas shipment ratio will be reduced to ensure a sufficient supply of domestic cooking oil.
Exporters will only be able to ship six times their domestic sales volume. This is eight times less than the current ratio.
“This is a preemptive step against the potential increase in domestic cooking oil prices due to increased demand during Ramadan and Eid al-Fitr, which will fall in March and April 2023,” said Budi Santoso, senior official of the Ministry of Commerce, quoted ReutersFriday (30/12/2022).
Septian Hario Seto, a senior official at the maritime affairs and investment coordination ministry, said the same. He said the move was specifically aimed at securing domestic supply in the first quarter of 2023.
“The government will continue to regularly assess the export ratio taking into account the availability and price of cooking oil,” Seto said on the same website.
Meanwhile, Indonesian Palm Oil Producers Association (GAPKI) secretary general Eddy Martono said last week his party had raised concerns with the government over the supply of cooking oil. This is related to the government’s biodiesel program and expectations of a decrease in palm oil production in the first quarter.
In this case, he said the government plans to increase the mandatory palm oil component in biodiesel to 35% starting Feb. 1, 2023. Regarding the export report, Eddy said this needs to be evaluated periodically. in the short term to avoid oversupply.
“If it turns out that the forecast is wrong and the yield doesn’t drop dramatically, you have to evaluate, otherwise the fresh fruit bunches will pile up back in the factory and this will anger the farmers,” Eddy said.
Please note that the price of Malaysian palm oil futures skyrocketed this Friday. It hit its highest level since December 1 at 4,193 ringgit or the equivalent of US$950.79 per ton.
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