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Navy seizes sixth vessel for allegedly ‘smuggling’ palm oil
The latest detention involved the Singaporean-flagged MV Mathu Bhum on Thursday.
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he Indonesian Navy has detained five foreign-flagged vessels and one Indonesian-flagged vessel for attempting to transport palm oil outside the country in direct violation of the palm oil rules currently in force.
The government imposed a mandatory domestic market obligation (DMO) for producers in late January, followed in late April by an export ban on cooking oil raw materials, which includes crude palm oil (CPO), refined palm oil and refined, bleached, deodorized (RBD) palm olein.
The latest detention involved the Singaporean-flagged MV Mathu Bhum on Thursday, when it was caught in waters off the port of Belawan in Medan, North Sumatra, carrying 34 containers of RBD palm olein en route to Port Klang, Malaysia.
“The Indonesian Navy will continue its operations at sea to enforce the export ban on palm oil," Navy Fleet Commander Vice Adm. Agung Prasetiawan told a press conference at Belawan Port on Friday afternoon.
Agung added that the Navy’s First, Second and Third fleet commands (Koarmada) were in charge of the operations in all Indonesian waters.
The five other tankers were the TB Ever Sunrise sailing under the Malaysian flag, MV World Progress (Liberia), MT W. Blossom (Tuvalu), MV Annabelle (China) and the Indonesian-flagged MV Toto XVI, all detained by the Navy’s Koarmada I that secures western Indonesian waters.
Koarmada I commander Rear Adm. Arsyad Abdullah explained that Ever Sunrise was carrying more than 1,799 metric tons (t) of palm acid oil (PAO), a by-product of the chemical refinement of palm oil, while World Progress was carrying 34,854 t of palm olein, W. Blossom 8,000 t of CPO, Toto XVI 2,800 t of RBD and Annabelle 13.3 million t of CPO.
Indonesia produces around 60 percent of the world's palm oil, which is used in a range of consumer products, from cosmetics to chocolate spreads. The domestic market consumes one-third of the total national output.
Vegetable oils are among the staple goods that have hit record-high prices in recent weeks following Russia's invasion of agricultural powerhouse Ukraine, according to the United Nations’ Food and Agriculture Organisation.
Indonesian producers have been reluctant to comply with the government’s DMO, imposed following a cooking oil shortage at home, because the current international prices promise higher export earnings.
Authorities have stepped up efforts in recent months to try and stabilize domestic prices in fear of public anger, after consumers in several cities were forced to queue for hours at distribution centers to buy subsidized cooking oil.
Indonesia banned exports of cooking oil raw materials as part of these efforts, which in turn pushed up the global prices of palm, soybeans, European rapeseed and canola oils to reach historic highs.
The government plans to lift the export ban when the domestic price of bulk cooking oil falls to Rp 14,000 (97 US cents) per liter, after it soared to Rp 26,000 per liter in recent weeks. As of Friday, the per liter price of bulk cooking oil had dropped to Rp 17,200.
