Business

Indonesia temporarily bans palm oil exports to regulate local markets

Written by The Frontier Post

ISLAMABAD (APP): Ambassador of Indonesia to Pakistan, Adam Mulawarman Tugio on Wednesday said that the Indonesian government temporarily banned global palm oil exports to regulate local markets and provide subsidized palm oil to locals.
While talking to APP in an exclusive interview here, he said that considering the global trade dynamics and the global supply chain, the decision was made on palm oil exports, which would improve price stability in Indonesia’s domestic market.
The Ambassador said, with the arrival of holy months of Ramzan, edible oil consumption in Indonesia also increases and it becomes difficult to provide edible oil to the local Indonesian market of 270 million people with global exports.
He said the decision was made after lengthy deliberations on food security in Indonesia and is likely to be revised soon as it is part of a short-term policy that will stabilize palm oil prices in the local market.
The Ambassador said that the global consumption of palm oil worldwide was currently 70 MT, of which 33 MT was produced in Indonesia. Similarly, Indonesia is the world’s largest exporter of palm oil, which also impact on the local Indonesian market and has to be adjusted according to its prices, he said.
He said that this was a temporary ban on palm oil which would be reviewed by the Indonesian government after which the supply of palm oil will start in the world market including Pakistan. They will review the policy aimed at stabilizing the palm oil market, he added.
In response to a question, he said that Pakistan was a big consumer of Indonesian palm oil and Pakistan was exporting $2.8 billion worth of palm oil annually from Indonesia. Adam M. Tugio said the policy was designed to meet the demand for palm oil in the local market in Indonesia, both at domestic and industrial level.
He said that People have been suffering for the past few months and the price of palm oil has been rising in the local market. He attributed the drop in demand and supply to a drop in supply of palm oil and rising prices in Indonesia.
Meanwhile, talking to APP, Amir Waheed, former president of Islamabad Chamber of Commerce and Industry (ICCI) and Palm Oil Exporter from Indonesia, said that the ban on palm oil export from Indonesia would have an impact on both industrial and domestic levels in Pakistan.
He said that due to demand and supply, local prices of edible oil would increase.
He said that Indonesia is a major contributor to global palm oil exports, which would increase prices in the global edible oil supply chain.
Senior business leader and former president, ICCI Atif Ikram, who owns ghee and oil mills in Islamabad, said Indonesia is the largest exporter of palm oil in Pakistan. He said that Indonesia’s ban on palm oil exports would create issues for the local industry. We are assessing the situation and a strategy is being prepared in this regard, Atif expressed.
According to the data issued here by Pakistan Bureau of Statistics, the palm oil import surged by 46.74 percent during the first three quarters of the current fiscal year as compared to the corresponding period of last year.
The palm oil import during July-March (2021-22) was recorded at $2,730.668 million against the imports of $1,860.934 million in July-March (2020-21), the data said.
On the other hand, the soyabean import also went up by 113.73 percent to $103.283 million as compared to the import of $48.325 million during last fiscal year.
On year on year basis, the palm oil import witnessed an increase of 5.43 percent during March 2022 as compared to the same month of last year.
The palm oil import during March 2022 was recorded at $290.524 million against the import of $275.549 million in March 2021), according to PBS data.
The soyabean import during the month under review also increased by 100 percent to $11.750 million as compared to the zero import of the same month of last year.
Meanwhile, on month on month basis, the palm oil import declined by 6.21 percent in March 2022 as compared to the import of $309.766 million in February 2022. The import of soyabean, however, went up by 27.7 percent in March 2022 as compared to the imports of $16.772 in February 2022.
The overall food imports increased by 15.46 percent from $6,121,358 million last year to $7,067,740  million during the current fiscal year.

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