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Palm oil crisis shakes up Indonesia's politics, global supplies
Coming amid the multiple impacts of the Russian-Ukraine war, the government's ban on palm oil exports has precipitated a general shortage of cooking oils across the globe and a potential political scandal at home.
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Workers transfer harvested palm fruits to a transport truck before being processing into crude palm oil (CPO) at a palm plantation in Pekanbaru, Riau, on April 23, 2022. (AFP/Wahyudi)
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cooking oil crisis that was initially triggered by the Russian-Ukrainian war is now shaking up both domestic politics and the global supply chain after the government announced last week it would ban all exports of crude palm oil (CPO), a key ingredient of cooking oils, amid a series of student protests against skyrocketing food prices.
The government is under increasing pressure to control inflation, in particular the surging prices of much sought-after cooking oils. This has become a rallying cry for student protesters already miffed by recent controversies over a proposal floated by avid supporters of President Joko “Jokowi” Widodo to delay the 2024 presidential election and extend his final term in office.
While the export ban is set to disrupt the global supply, the cooking oil crisis has taken a political turn in Indonesia, with a member of the nation’s largest ruling party claiming that the crisis was linked to the efforts to extend the President’s term.
The government’s CPO export ban, which has shocked the global market, came only two days after the Attorney General’s Office (AGO) detained a senior Trade Ministry official and three corporate executives over alleged violations in processing palm oil export permits. The executives are from private cooking oil producers Permata Hijau Group, PT Wilmar Nabati Indonesia and PT Musim Mas, all members of the Indonesian Palm Oil Association (Gapki).
Read also: Indonesia to ban exports of cooking oil, ingredients
Industry players have cried foul over their arrests, saying that the three accused executives had followed the existing regulations. Vegetable oil producers have responded to the AGO’s move by threatening to withdraw from the government’s subsidized bulk cooking oil program over cooking oil and CPO regulations that had only burdened the sector.
‘More suspects’
