Indonesia bans palm oil exports

Indonesia, which is the world’s top palm oil producer, announced on Friday April 22nd that it planned temporarily to ban exports of palm oil. Indonesia accounts for more than half of the global palm oil supply.

Indonesia’s President Joko Widodo said in a public broadcast that he wanted to ensure the availability of food products at home, noting that global food inflation had hit a record high following Russia’s invasion of Ukraine. “I will monitor and evaluate the implementation of this policy so that the availability of cooking oil in the domestic market becomes abundant and affordable,” he said.

Atul Chaturvedi, president of the trade body of Solvent Extractors Association of India (SEA), said the announcement would hurt top buyer India and consumers globally. “This move is rather unfortunate and completely unexpected,” he said.

Other countries have experimented with crop protectionism to try to keep domestic prices down. Argentina, the world’s top exporter of processed soy, briefly halted new overseas sales of soy oil and meal in mid-March and raised the export tax rate on those products from 31% to 33%.

Large supplies of alternatives to palm oil and sunflower oil, including soy and rapeseed oil, are not readily available, as droughts have damaged crops most recently in Argentina, Brazil and Canada.