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Indonesia to tighten CPO export rules temporarily
Exporters need to show proof of selling CPO domestically each time they apply for permits over the next six months, starting Jan. 24.
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A worker moves palm oil fresh fruit bunches (FFB) aboard a truck at a plantation in Central Kalimantan on Dec. 19, 2015. (JP/Dhoni Setiawan)
I
ndonesia, the world's largest exporter of palm oil, is set to temporarily restrict crude palm oil (CPO) exports starting late January as the country seeks to combat rising cooking oil prices by forcing producers to prioritize domestic markets.
The Trade Ministry said on Tuesday that CPO exporters needed to show proof of selling CPO domestically each time they applied for export permits with the ministry over the next six months, starting Jan. 24. The ministry will withhold export approval documents until receiving such proof.
All exporters are subject to this policy, including those that have never supplied domestic markets before and are not affiliated with cooking oil producers.
“This is not an export ban. We want to ensure CPO availability domestically,” Trade Minister M. Lutfi told reporters during a virtual press conference on Tuesday.
The announcement came after the country saw a hike in cooking oil prices for several consecutive months following a surge in international CPO prices amid rising demand and limited production. Trade Ministry data shows that domestic cooking oil prices rose 46.92 percent year-on-year (yoy) to Rp 19,100 (US$1.33) per liter on Wednesday.
The policy adds to a list of Indonesia's protectionist policies, such as its market-rattling nickel export ban and coal export ban. Indonesia imposed the latter in January as coal miners were flouting domestic market obligation (DMO) rules, which require all miners to sell at least 25 percent of their output locally at no more than $70 per ton.
Read also: Govt to use carrot, stick in coal DMO policy
