Indonesia seeks to balance international and local demand for palm oil: Official
Indonesia is seeking a balance between taking advantage of high global palm oil prices while ensuring food at home is affordable, a senior government official said on Wednesday, amid the current ban on the countries on vegetable oil exports.
The Southeast Asian nation, the world’s top producer of palm oil, has since April 28 halted exports of crude palm oil and refined products to control soaring cooking oil prices. At her place.
The surprise move rocked global vegetable oil markets, which were already struggling after the war in Ukraine, and cut off much of the sunflower oil supply. Palm oil accounts for more than a third of the global vegetable oil market, while Indonesia accounts for around 60% of palm oil supply.
Musdhalifah Machmud, Coordinating Deputy Minister of Economy, said the government wanted palm oil to be not only available but also affordable.
“As a government, we need to maintain a balance between high international prices and (control) domestic prices to meet our people’s demand for cooking oil,” she said.
The official said she could not make any promises regarding future palm oil policy since the oversight involved various ministries and she was “waiting for the best decision on palm oil from our most senior leader.”
Fadhil Hasan, an official with the Indonesian Palm Oil Association (GAPKI), said he hoped the ban could be lifted within two weeks to a month.
Chief Economy Minister Airlangga Hartarto said the ban would remain in place until the price of bulk cooking oil falls to 14,000 rupees ($0.9629) per liter in all the countries. On Tuesday, Ministry of Commerce data showed bulk cooking oil was being sold at Rs 17,600 a litre.
Gabriel Tay, associate economist at Moody’s Analytics, said in a research note that while the export ban may remedy the high price of cooking oil, it will be a “Pyrrhic victory”, which could hurt to the Indonesian economy.
“Hasty and poorly communicated policies do not inspire confidence in government; investors are looking for political stability,” Tay said, noting that Indonesia also imposed a surprise coal export ban earlier this year and that the palm oil ban was preceded by various policy changes. likely to deter direct investment.
“It will undermine Indonesia’s ambition to transition from a largely unprocessed commodity exporter to a manufacturing nation.”