JAKARTA – Indonesia’s economic coordinating ministry is scheduled to hold a briefing on Friday at 0300 GMT on the resumption of the Southeast Asian country’s palm oil exports, according to a media invitation.
President Joko Widodo has announced that Indonesia, the world’s largest producer of edible oil, will lift export bans from Monday following the imposition of an April 28 policy to control the high domestic price of cooking oil.
The government has decided to lift the ban despite the fact that the price of bulk cooking oil has not yet reached the target of Rs 14,000 ($ 0.9550) per liter.
Jokoi, known as the president, said he believed the price of cooking oil would ease towards the target and promised that the authorities would closely monitor the supply situation.
The introduction of export bans shocked the world edible oil market.
Used in everything from palm oil, margarine to frying fats and shampoos, comprising one-third of the world’s vegetable oil market, Indonesia supplies about 60%.
Wong Chi Ting, an analyst at Maybank, said international crude palm oil prices were expected to soften after the decision to lift the embargo, but also mentioned the prospect of “alternative measures to ensure sustainability and availability” of cooking oil in the long run.
“For international buyers, the availability of Indonesian palm oil will put some pressure on international CPO (crude palm oil) prices. Overall, the lifting of the export ban is a relief for Indonesian-based farmers, ”he said in a note addressed to clients.
Malaysia’s benchmark palm oil contract traded down 1.1% overnight.
Indonesian farmers have protested against export bans this week.
The domestic price of palm fruit has dropped by almost 70% since the ban, said Gulat Manurong, chairman of the Indonesian small owners group APKASINDO, in a statement, welcoming the move to resume exports.
“The export embargo has shown Indonesia how important palm oil is to the country,” Gulat said. ($ 1 = Rs. 14,660.0000) (Reporting by Bernadette Christina Munthe, Ed Davis Editing Francisca Nangoy)