Indonesia Bans Palm Oil Exports


From April 28, Indonesia will halt its export of palm oil in an unexpected move, announced by its President Joko Widodo. The prohibition is being introduced in the wake of soaring global food inflation due to the Russia-Ukraine war.

“I will monitor and evaluate the implementation of this policy so availability of cooking oil in the domestic market becomes abundant and affordable”, be addressed in a video.  

Troubles In Domestic Market 

Indonesia is the world’s biggest producer and exporter of palm oil, which is used in many areas, especially in cooking, biofuels, etc.

With the war in Ukraine, prices of sunflower oil surged, thereby affecting the prices and availability of palm oil in Indonesia. The price of one liter of palm oil in the Southeast Asian country had reached 28,000 rupiahs or 1.8 USD.

Corruption and hoarding of palm oil were also being reported with many people participating in demonstrations across the country in protest.

For similar reasons, Indonesia had introduced restrictions on palm oil exports in February as well when the war in Ukraine had started. But it soon lifted them after a sharp rise in inflation.  

The ban is being brought into effect to benefit the local market and ensure that the country’s people do not struggle to buy the oil for their daily use.

However, the decision may be disastrous for countries like India which is one of its biggest importers. The demand is such that India imports around half of its edible oil from Indonesia, with Malaysia, also accounting for a significant percentage.  

Worldwide Shortage

The extreme step is further affected by the dire situations in countries like Argentina and Malaysia, which are two of the biggest exporters of oil in the world.

Argentina, the biggest exporter of processed soy oil, had halted new exports in mid-March, after which the South American nation hiked the export tax rate. The reason behind this was a drought that had reduced its harvest and limited supplies.

Malaysia had also faced production issues due to a shortage of labor as a consequence of the pandemic. The situation is unlikely to improve with Ukraine nowhere near the end of the war either. 

Published By: Sachin Sonawane

M. Uma Mahesh
M. Uma Mahesh
M. Uma Mahesh is a first year law student of USLLS, GGSIPU. He has a keen interest in sports and environment, with a passion to improve the latter. He is an ardent reader as well.



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