Indonesia will ban all exports of palm oil and its raw materials from Thursday, president Joko Widodo announced Friday.
Indonesia, the world’s top palm oil producer, will soon ban exports of the most widely used vegetable oil in a bid to ease domestic shortages and tackle soaring prices. The ban will add to growing food supply chain concerns after the Russian invasion of Ukraine wiped out large sources of grain.
“Indonesian shipments of palm oil to India subcontinent (6.99m tons in 2021), China (4.25m tons), and Europe (2.89m tons) will be disrupted under the new policy, likely weighing on freights in these trade lanes if the measure is enacted for an extended period. Some expect the measure to be short-term and not last for long. But palm oil prices are expected to jump this week as Indonesia accounts for about a half of global exports,” an update from Singapore’s Eastport Maritime stated today.
Indonesia exported 26m tons of palm oil in 2021. There has been no official word on how long the ban will last. Similar recent bans on other commodities in Indonesia, such as coal, have rarely been properly upheld for more than a fortnight.
By Sam Chambers