A worker loads palm oil fruits into a truck in Tarailu, Mamuju, in the province of West Sulawesi on May 23, 2021. (Antara Photo/Akbar Tado)

Government Warned against Banning Palm Oil Exports

BY :JAYANTY NADA SHOFA

NOVEMBER 03, 2022

Bali. The government’s decision to halt palm oil export to cool cooking oil prices earlier this year was not without consequences, and this is something that the government should take note of in future policymaking, according to the 2022 Indonesian Palm Oil Conference or IPOC.

Indonesia in late April suspended exports of its palm oil and its derivatives in the face of cooking oil price hikes. 

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When the ban was in effect, companies had to deal with overflowing stockpiles. Farmers raised concerns over the declining purchase of oil palm fruit and domestic price, according to Indonesian Palm Oil Association (Gapki) chairman Joko Supriyono.

The ban only lasted for three weeks. However, recovering from the short-lived ban was not a skip in the park.

“The recovery from the impact was not as easy as expected. After the lifting of the export restriction, exports began to increase but were not maximized due to several factors, ranging from the unavailability of transport vessels to high prices, so that purchasing power weakened,” Joko said at the 2022 IPOC in Bali on Thursday.

Indonesian Employers Association (Apindo) commented on the temporary palm oil export restriction. The ban came at a time when the palm oil price was skyrocketing. With Indonesia out of the market, this only gave more room for other palm oil-producing countries. This is something that the government should take note of in future policymaking.

“Learning from the turmoil in the price and supply of cooking oil earlier this year, we shouldn’t let other countries reap the benefit in the end. Because we stopped the export when the price of palm oil was high,” Apindo chairman Hariyadi Sukamdani told a press briefing on the sidelines of the 2022 IPOC.

At the conference, Gapki said that weakening purchasing power and abundant stock in producing countries had triggered a decline in global palm oil prices in the past few months. Several countries have begun to slide into recession, dampening their purchasing power.

“The Indonesian government needs to take anticipatory measures like continuing to encourage exports by providing various incentives such as zero levy, lower export duty rates, and ease of export,” Joko said.

The government recently extended the export levy exemption on crude palm oil until the end of this year.

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