Jakarta. Starting 00:00 a.m. today, Indonesia has stopped all palm oil and its derivatives exports to drive cooking oil prices to below $1 at local markets.
President Joko "Jokowi" Widodo announced the final decision on the export ban late on Wednesday, less than a day after his senior minister said the export ban would only affect the refined, bleached, deodorized, or RBD, palm olein, which is the raw material for cooking oil.
“I want to emphasize that for the government, the people's basic needs hold the most important consideration. That is the highest priority in every decision making," Jokowi said in a broadcasted statement.
"I know the country needs taxes. The country needs foreign exchange. The country needs a trade balance surplus. But meeting the people's needs is a more important priority," he said.
Indonesians have been struggling to buy cooking oil in the past few months, with some having to stand in line for hours to get their hand on just one or two liters of the oil. Local producers prefer to sell their products abroad, taking advantage of higher global commodity prices instead of
Data from National Strategic Food Price Information Center (PIHPS Nasional) shows bulk cooking oil fetches Rp 19,650 ($1.36) per liter on average across Indonesia. Before the price increases, the cooking oil is sold at between Rp 13,000 to Rp 14,000 a liter.
Jokowi said the government intended to keep the export ban until the bulk cooking oil price dropped below Rp 14,000 a liter.
As the largest palm oil-producing country globally, it was ironic that Indonesians even had difficulty getting cooking oil, Jokowi said.
"I, as President, let possibly happen. It's been four months since the scarcity started. The government has made various policies, but it has not been effective," he said.
President Jokowi acknowledged that this prohibition negatively impacted, potentially reducing production and unabsorbed farmers' crop yields. However, this policy aims to increase domestic supply until supply is abundant.
"I ask for awareness of the palm oil industry to meet domestic needs, prioritizing domestic needs," Jokowi said.
"This is my benchmark for evaluating the policy. Of course, once domestic needs have been met, I will lift the export ban," said President Jokowi.
Jokowi's decision to take a drastic measure on palm oil came days after political pollsters showed that public satisfaction with his administration was declining.
According to a political pollster Charta Politica, public satisfaction with the Jokowi administration's performance has been downward this year. In January 2022, the public satisfaction with the government was at 71.7 percent. Then it fell to 65.3 percent in February and 62.9 percent in April 2022.
On the other hand, dissatisfaction with the government has also tended to increase in recent months. In January 2022, public discontent was at 26.2 percent, then increased to 32.7 percent in February, and rose to 35.7 percent in April.
The respondents in the Charta Politica survey pointed out that increasing basic needs prices, mainly the cooking oil, was their top concern in the past few months. 46.7 percent of the respondents said rising prices were the main problem that the government needed to tackle.