Indonesia bans palm oil exports

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 as well as sunflower oil.

“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.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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