Indonesia to lift palm oil export ban from Monday
The world’s top palm oil exporter on 28 April halted shipments of crude palm oil and some derivative products in a bid to tame soaring prices of domestic cooking oil
Indonesia has announced that it will lift the ban on palm oil exports from Monday due to improvements in its domestic supply.
The world's top palm oil exporter on 28 April halted shipments of crude palm oil and some derivative products in a bid to tame soaring prices of domestic cooking oil.
Indonesia President Joko Widodo on Thursday said the supply of bulk cooking oil had now reached a level greater than needed, although bulk prices had not yet receded to the targeted price.
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The announcement comes as a relief to many countries including Bangladesh as the resumption in export will reduce the volatility of the global oil market, reports Bloomberg.
Biswajit Saha, director of City Group, said, "Indonesia supplies 90% of Bangladesh's palm oil at low prices. Although Malaysia is an alternative source, the price is high there. The ongoing instability in the country's market will be reduced once Indonesia resumes exports."
Biswajit Saha, however, did not confirm whether the price of palm oil would go down in the country.
According to the Ministry of Commerce, Bangladesh imports about 1.3 million tonnes of palm oil annually, 90% of which comes from Indonesia while the remaining 10% from Malaysia.
The country faced an oil crisis after Indonesia halted exports. Traders stopped supplying oil to the market just before Eid, citing losses.
On 5 May, the government increased the price of refined palm oil by 24%. At present, palm super oil is selling at Tk172 per liter.
According to the Bloomberg report, palm oil price in Indonesia rose to Rp19,800 per liter (Indonesian Rupiah) before the ban. The country then stopped exporting to reduce the price of palm oil to Rp14,000 per litre.
Despite the ban, the price did not come down to the targeted level. The price of per litre oil now stands between Rp17,200-17,600.
In addition, the Indonesian government is also considering the welfare of about 25 million workers employed in the palm oil industry. That is why the country is withdrawing its decision.
Indonesia's new decision will bring a lot of relief to the world market. Ukraine has already stopped exporting sunflower oil due to the ongoing war situation.
On the other hand, vegetable oil accounts for about one-third of the world's edible oil market, with Indonesia supplying about 60%.
