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Indonesia Palm Oil Approval Process ‘Unlikely to Hit Exports’

Jakarta requires approval for exports of crude palm oil, used cooking oil and consumption-ready refined, bleached and deodorised palm olein

Palm oil
A worker carries a palm oil fruit bunch at a plantation in Slim River, near Ipoh in Malaysia. Photo: Reuters.


Indonesia’s biggest palm oil association on Wednesday shrugged off a new government policy requiring exporters to gain approval for their shipments and declare their domestic sales.

The world’s top producer and exporter of palm oil has been trying to tame domestic cooking oil prices that have climbed about 40% from a year earlier, in line with high global palm oil prices.

In efforts to control prices the Indonesian Ministry of Trade said it would require exporters to obtain approval for exports of crude palm oil, used cooking oil and the consumption-ready product known as refined, bleached and deodorised palm olein.

The permit requirement takes effect from January 24 and will be imposed for six months, the ministry said. Exporters are currently only required to submit customs declarations for shipments.

“I think there will be no impact on exports,” Joko Supriyono, the chair of the palm oil association known as Gapki, said. “This is for the sake of improving exports’ orderliness amid national cooking oil programme to ensure availability and supply security.”

Gapki estimates that the export value of crude palm oil and its derivatives could reach US$35 billion this year with the average price is estimated at about $1,300 per tonne.

Global palm oil prices last year surged amid demand recovery from major buyers such as India and China while production in Indonesia and rival Malaysia slowed. Malaysia’s palm oil inventories at the end of December shrank to their lowest in five months.

Malaysian exporters are banking on higher exports to sub-Saharan Africa, which “will experience a significant rebound in 2022”, the Malaysian Palm Oil Council said this week, after a modest decline recorded this year.

Prices of palm oil benchmark contract in Malaysia rose as much as 3.2% in the early trade on Wednesday in reaction to the Indonesian policy and amid higher crude oil futures.


  • Reuters, with editing by George Russell




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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.


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