To remain in force until domestic prices fall below 14,000 rupiah
Indonesia has imposed a “temporary export ban” on crude palm oil (CPO), red palm oil (CPO), palm oil mill effluent (POME), refined bleached deodorized (RBD) palm oil and used cooking oil, an order issued by the Cabinet Secretariat in Jakarta said.
The ban came into effect from Thursday with traders in Singapore dubbing the move as ‘baffling.’ The order says the government will also impose strict punishment for export ban violations. “This temporary export ban is (part) of the government’s commitment to give priority to the communities. Thus, any violations will be strictly penalised. Once again, the government will impose strict punishment against those who violate the export ban,” said Airlangga Hartarto, Coordinating Minister for Economic Affairs.
Domestic prices target
According to Airlangga, the Ministry of trade regulates export ban on CPO and its derivative products in order to avoid misinterpretation of the policy. He further said the implementation of the export ban will continue until the bulk cooking oil price drops below 14,000 Indonesian rupiah (approximately Rs. 74) per litre in all regions across Indonesia.
The export ban also aims to ensure that CPO products can be prioritised to ensure availability of bulk cooking oil at 14,000 rupiah per litre in traditional markets and micro, small-sized enterprises. Indonesia has imposed a policy on bulk cooking oil. However, the policy is deemed ineffective as bulk cooking oil is still sold at a price above 14,000 rupiah per litre in several regions. “Implementation of the export ban will be monitored continuously. Every violation will be strictly penalised in accordance with the law and regulations. And if it is necessary, the policy will be adjusted to suit the prevailing situation,” Airlangga remarked.
Consignments held up
Furthermore, in a bid to accelerate the distribution of bulk cooking oil to the communities, the government has sped up price subsidy payment through the Oil Palm Plantation Fund Management Agency without compromising on good governance.
Meanwhile, Reuters reported that 2.9 lakh tonnes of palm group of oils headed for Indian ports have got stuck due to the Indonesian ban.Crude palm oil futures for July on Bursa Malaysia Derivatives gained a tad on the announcement to close at 6,926 Malaysian ringgits ( Rs. 1,21,680) a tonne. Prices, however, were lower than the previous day’s close.