The Indonesian government clarified, Monday, April 25, the landscaping decreed on palm oil exports to limit the rise in cooking oil prices on the internal market. It will only concern refined products.
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After announcing, Friday, April 22, a surprise embargo on palm oil exports on Friday, April 22, scheduled to come into force Thursday, April 28, the Indonesian government partially revised its copy. Only refined products from palm oil be used for the manufacture of cooking oil is affected, and not gross palm oil, according to communication from the Ministry of Agriculture dated Monday April 25.
This clarification should mitigate some of the deleterious effects of embargo on the national market, but also on the world markets, which have been fading in recent days, in a context of shortage of sunflower oil due to war in war Ukraine. Thus, the embargo should now concern only 30 % to 40 % of Indonesian exports of palm oil. The adjustment was notably welcomed with relief in India, its first customer. However, it could contribute to the rise in prices in the food industry on all continents.
Indonesia is the first palm oil producer on the planet, and the first exporter state, with 60 % of the world market, selling abroad to two thirds of its production, or about 30 million tons per year. However, the persistent increase in courses since the end of December 2021 has had an inflationary effect in the country. In January, the government then imposed on producers a quota forced them to reserve 20 % of their production of palm oil, all products combined, at the internal market at fixed prices, then 30 % in March. Before deleting it, in favor of an enhanced export tax. At the same time, a cap in the price of cooking oil, also imposed in January, was lifted in favor of direct subsidies.
These round trips have led to price fluctuations, cooking oil rushes on the part of consumers, and speculative behaviors in industry, adding to dissatisfaction against increases in food prices , and nourishing popular vindictive against a “mafia of cooking oil” ready to do anything to get rich on the back of consumers. Wednesday, April 20, an investigation was opened for corruption within the Ministry of Commerce following the allocation of export permits to three palm oil producers who would not have respected quotas for the national market.
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According to a survey carried out in mid-April by the Indikator Politik Indonesia Institute, Indonesian President Joko Widodo, saw his popularity erode to go from 75.3 % in January to 59.9 %, a level that ‘He had already reached the worst of the pandemic of COVID-19, at the time of the vanging of the Delta variant, in 2021. On April 22, he announced an embargo on the exports of palm oil, a radical measure, in principle Temporary, supposed to calm the game as the long holidays of the Lebaran approach, for the celebration of the end of Ramadan, on May 2 and 3. “I will continue to monitor and assess the implementation of this policy in order to provide cooking oil in this abundance country [and] at an affordable price,” he said. Tuesday, April 26, Widodo charged his Minister of Economy, Airlangga Hartarto, to stabilize the price of kitchen oil at 14,000 rupees per liter (or 0.91 euros), 30 % below Current price.
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