Indonesia will ban the export of palm oil and its derivatives to avoid domestic shortages and dampen rising prices. The export ban will come into effect next Thursday and will be in effect indefinitely, President Joko Widodo has announced.
Indonesia is the largest producer and exporter of palm oil, the most widely used vegetable oil. Together with Malaysia, the country accounts for 85 percent of global palm oil production. Demand, and with it prices, has risen recently as the war in Ukraine has led to global shortages of sunflower oil, another vegetable oil.
As a result of the announced export ban in Indonesia, the price of soybean oil rose by 4.5 percent to an all-time high today. That price was already high due to a period of drought in Argentina, the largest soybean exporter in the world. That country has also taken measures in the form of an export tax to protect the domestic market.
Corruption Investigation
This week, the Public Prosecutor’s Office in Indonesia announced that it is opening a corruption investigation that also involves a high-ranking employee of the Ministry of Commerce and three executives from the palm oil industry.
Earlier this year, the government required all palm oil exporters to ensure sufficient domestic stocks and not to follow soaring international oil prices. The ministry employee is suspected of granting export licenses for crude palm oil and derivatives such as cooking oil, which has further increased the shortages and price increases in the interior.
Yesterday, hundreds of people protested in the capital Jakarta against rising food prices in the country. They demanded a reduction in the price of fuel and commodities such as oil.
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