News ID: 321480
Published: 0254 GMT May 09, 2022

Indonesia faces international pressure over palm oil export ban

Indonesia faces international pressure over palm oil export ban
WILLY KURNIAWAN/REUTERS

A worker unloads fresh fruit bunches during harvest at a palm oil plantation in Kampar regency in Riau Province, Indonesia, on April 26, 2022.

Indonesia is coming under growing international pressure over its ban on palm oil exports amid soaring food prices worldwide.

The ban by the world’s largest palm oil exporter has put pressure on edible oil prices at a time when supplies are already under strain due to poor harvests, the Ukraine war, and labour shortages caused by the COVID-19 pandemic, Al Jazeera reported.

President Joko “Jokowi” Widodo has justified the ban, announced on April 22, as a short-term measure after domestic prices of cooking oil, of which palm oil is a key ingredient, soared more than 50 percent.

While Indonesia’s trade partners have yet to officially protest the ban, signs of discontent are emerging in countries, including India and Pakistan.

Analysts say it is likely that governments are making vocal representations to Jakarta behind the scenes.

Jakarta’s ban followed a raft of earlier measures aimed at controlling palm oil supplies, including a cap on cooking oil prices and a two-litre limit on purchases of the product that resulted in desperate customers queueing at stores for hours. Last month, palm oil prices rose more than 6 percent on the Bursa Malaysia Derivatives Exchange, coming close to the all-time high reached in March.

Last week, India raised concerns about “trade barriers” caused in part by the palm oil ban at the World Trade Organization (WTO), according to local media.

In late April, it was reported that almost 300,000 tonnes of edible palm oil destined for India has been trapped in Indonesia as a result of the ban.

Indonesia is the second-largest supplier of palm oil to India after neighbouring Malaysia, exporting more than 3 million tonnes of the product to the South Asian country in 2021.

In Pakistan, there are fears that stocks of palm oil could run out in May, prompting the Pakistan Vanaspati Manufacturers Association (PVMA) last week to call on the Ministry of Industries and Production to “take up the issue with Indonesia”.

Pakistan imports 80 percent of its palm oil from Indonesia and 20 percent from Malaysia.

 

 

 

 

 

 

   
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