Indonesia, the world’s largest producer of palm oil, halted its exports on Thursday for an indefinite period. This ban, which also applies to other vegetable oils, was decided by President Joko Widodo to counter a shortage of cooking oil in the country.
Indonesia has been experiencing a shortage of refined palm oil, the most widely used cooking oil in the archipelago, for several months. Several events have led to this situation, such as the rise in the price of energy first of all, explained Thursday in La Matinale Philippe Chalmin, professor at Paris Dauphine University, specialist in raw materials.
The poor soybean harvest in South America and the drought in Canada which affects the production of rapeseed oil are also invoked. Not to mention the labor problems caused by the Covid and the uncertainties regarding the Russian and Ukrainian production of sunflower oil: all these elements have caused oil prices to jump on the markets.
In a last-minute reversal on Wednesday evening, authorities clarified that the suspension would affect all oilseed exports, not just products for edible oils, as reported a day earlier.
Export Priority
To maximize profits, Indonesian producers have focused on exporting, depriving the domestic market of this much-needed cooking oil. But the measure imposed by President Widodo seems disproportionate, Indonesia not being a sufficient outlet for its annual production since “it exports practically two-thirds of its production”, further noted the expert.
This embargo is a new shock wave on food prices. The latest United Nations indices show it: food prices, particularly because of the price of oils, are now reaching record levels.
Edible oils had already hit all-time highs in March due to insufficient global supplies following Russia’s invasion of Ukraine, two major sunflower oil-producing countries.
Sujet radio: Katja Schaer
Web adaptation: lan with afp