Indonesia continues to restrict palm oil exports, how will this affect prices?

Published 2023년 2월 16일

Tridge summary

Indonesia is imposing restrictions on palm oil exports to maintain sufficient domestic vegetable oil supply during the Ramadan and Eid al-Adha holidays, leading to a global supply drop of approximately 800 thousand tons in Q1 2023. This move aims to reduce domestic cooking oil prices, which have surged due to rising vegetable oil prices and consumer complaints about the availability of subsidized oil. The country also increased the palm oil biofuel mandate from 30% to 35%, further limiting exports. Meanwhile, palm oil futures remain steady, and prices for sunflower oil have decreased due to reduced demand in China and India, albeit Ukrainian sunflower oil is experiencing increased demand from European buyers.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Restrictions on palm oil exports from Indonesia will help support vegetable oil prices. Indonesia's government is continuing a policy of restricting exports to ensure sufficient supply of vegetable oil during the Ramadan and Eid al-Adha holidays, and increasing the supply of cooking oil by 50%, which officials say will lower domestic prices. We will remind that after the complete ban on exports in April 2022, world prices for palm oil increased by 60%. In January 2023, the Indonesian government tightened palm oil export restrictions, reducing the domestic market obligation (DMO) ratio from 1:8 to 1:6. This means that for every metric ton of palm oil sold domestically, exporters will only be allowed to export 6 tons of palm oil instead of 8 tons. New restrictions on the export of palm oil from Indonesia will lead, according to analysts, to a decrease in supplies to the world market by approximately 800 thousand tons in the first quarter of 2023. Between February 6 and May 1, 2023, ...

Source: Graintrade