JAKARTA- On Wednesday, Indonesia reversed course from earlier statements and announced that crude palm oil will be included in the country’s export ban on raw materials for cooking oil. The ban, set to go into effect at at midnight local time on Wednesday, was previously announced earlier this month. On Wednesday, the country’s chief economic minister said just hours before the restriction goes into effect, that crude palm would in fact be part of the ban that includes refined, bleached, and deodorized palm olein.
Indonesia also activated its Navy to enforce the ban to prevent any export shipments of crude palm oil, refined palm oil and used cooking oil, among other palm products. The move dramatically tightens an already tight global supply of edible oils that saw global prices surge when the Russian invasion of Ukraine took Ukrainian sunflower oil supplies off the market.
Indonesian President Joko Widodo said in a separate statement that “Once domestic needs have been met, of course I will lift the export ban because I know the country needs taxes, the country needs foreign exchange, the country needs a trade balance surplus, but meeting the people’s basic needs is a more important priority.”
Both canola and soyoil prices pushed to new record high levels this morning as a result of these developments. Palm oil futures on the Malaysia exchange surged by 9.8% on Wednesday.