Key Points
- Indonesia started to restrict its oil exports from this week.
- This will further intensify the global food crisis.
- The export restriction will provide concession for the cooking oil shortage within Indonesia.
Indonesia, the world’s largest palm oil provider, imposed a palm oil export ban this week. The ban expands to include crude palm oil as well. Joko Widodo, The president of Indonesia, announced the ban of cooking oil exports and raw materials necessary. According to the president, the ban will last “until further notice”.
Indonesia showed signs of struggle with cooking oil supplies in the past few months. Hence, a limited export curb was introduced for palm oil. This new complete ban of exporting palm oil and related materials is expected to thaw the cooking oil crisis of Indonesia. The government intends to increase the local cooking oil supply. The ban will commence from Thursday.
The giant Southeast Asian economy, Indonesia, is currently the world’s biggest palm oil producer. The palm oil export ban can lead to a spike in the already tense global food crisis. And palm oil holds the position of the most widely used cooking oil in the world. Thereby, hundreds of palm oil related consumer products may inflate prices.
Though the palm oil export ban may cause concerns throughout the globe, Indonesian residents will benefit from this greatly. Reuters and Bloomberg reported that the government will make an exception for crude palm oil from the palm oil export ban. The restrictions will still include palm olein. According to analysts, palm olein makes 40% to 50% of the exports of Indonesia.
Reference,
https://www.channelnewsasia.com/asia
