Indonesia: Trade Ministry issues detailed policy on palm oil exports

  • The Trade Ministry on 23 May 22 issued a regulation with detailed terms for exporting palm oil in conjunction with the government’s lifting of the three-week export ban on the same day.
  • Trade Ministry Regulation No. 30/2022, which covers crude palm oil (CPO) and derivative products, requires palm oil producers to sell part of their production output in the domestic market at certain prices, the former dubbed domestic market obligation (DMO) and the latter domestic price obligation (DPO), to be eligible for an export permit.
  • Producers that do not meet the DMO and DPO requirements may receive a written warning or have their export permit suspended or revoked. The regulation is effective immediately, with the ministry saying it had briefed companies on the new policy.
  • “Fulfilling the domestic CPO demand in a sustainable way remains the government’s top priority,” Trade Minister M. Lutfi said in a statement.
  • According to the new regulation, the Trade Ministry’s international trade director general is responsible for determining the domestic palm oil quota for each exporter.
  • Oke Nurwan, the ministry’s domestic trade director general, said the government would periodically revise the DMO and DPO policy.
  • The National Strategic Food Price Information Center (PIHPS) recorded that the price of bulk cooking oils stood at IDR18,600 as of 24 May 22.
  • Alpian Arahman, chairman of the Indonesian Oil Palm Farmers Association of Struggle (Apkasindo Perjuangan), said that lifting the export ban had increased the price of fresh fruit bunches (FFB) to between IDR2,300-IDR2,400 per kilogram from IDR1,600 per kg while the ban was in force, though prices remained lower than the usual range of IDR3,600-IDR3,800 per kg.
  • “Not all FFB are being bought by palm oil factories. Some of them have quotas,” he said during a meeting with the House of Representatives.
  • Indonesian Palm Oil Association (Gapki) chairman Joko Supriyono, said that the country’s palm oil exports had reached 33.6 million tons in 2021, nearly double the domestic consumption of around 18 million tons.
  • “In terms of supply, it is not a problem. It is just a matter of managing the supply in terms of distribution,” he added.

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