Indonesia: According to the document of the Ministry of Agriculture, the export of crude palm oil will continue. The ban on export will be applicable only to refined, bleached, and deodorized palm oil. That is, that part of palm oil, which is used in cooking, will be banned.
Indonesia has partially modified its decision to ban the export of palm oil. Due to this, the world has got some relief from the fear of inflation and rising. Indonesian President Joko Widodo had earlier said the ban on palm oil exports would go into effect indefinitely from Thursday. But later when the Ministry of Agriculture released its details, it was clear that this ban is partial.
According to the document of the Ministry of Agriculture, the export of crude palm oil will continue. The ban on export will be applicable only to refined, bleached, and deodorized palm oil. That is, that part of palm oil, which is used in cooking, will be banned. Crude palm oil is used in other products. According to experts, the details revealed to mean that the prices of edible oils in the international market will be affected, but other products will be spared from it.
Palm oil is used in the production of many other consumer products, including food and cosmetics. Indonesia accounts for 60 percent of the world’s palm oil production. Ukraine is the second-largest producer of palm oil after Indonesia. The supply of this product from there has been badly affected due to the ongoing war. Because of this, inflation has increased around the world.
Palm oil is used extensively in the production of cooking oil in Indonesia. The consumption of edible oils increases here in the month of Ramadan. President Widodo has said that his government will ensure that edible oil is available in sufficient quantity within the country at an affordable rate. However, market experts do not agree that stopping exports will make edible oil cheaper in Indonesia.
Economist Bhima Yudhishthira at the Jakarta-based think-tank Center for Economics and Law Studies has said – ‘If raw materials are available on a large scale, then it will not automatically reduce prices in the domestic market. Rather, the earnings from exports will definitely decrease. He told the website NikkeaAsia.com- ‘There will be a loss of foreign exchange of about three billion dollars every month due to the stoppage of exports. In the long run, this could have an impact on the strength of the rupiah (Indonesian currency).
Yudhishthira has warned that the countries most affected by this decision of Indonesia may retaliate. India, Pakistan, and China may stop exporting garlic to Indonesia. Meanwhile, Malaysia’s Minister of Plantation and Commodity Juraida Kamaruddin has said that Malaysia is ready to supply palm oil to the world market. He said that due to the opening of borders after the Corona epidemic, there is a strong possibility of increasing palm oil production in Malaysia.
BV Mehta, executive director of the Solvent Extractors Association of India, has said that Indonesia’s sudden decision to stop exports will have a very bad impact on India and other major consumer countries. He told the website NikkeiAsia- ‘India, Pakistan, and China are all three dependents on Indonesia for palm oil imports.’ He said there was already a sunflower oil crisis due to the war in Ukraine. Now the difficulty will get worse. India consumes 20 million tonnes of cooking oil every year. Of these, the share of palm oil is 8 million tonnes.
According to the latest data from the Food and Agriculture Organization (FAO), a United Nations body, the prices of vegetable oils increased by 23.2 percent in March. The price of these oils had never been seen before.
