Indonesia raises palm oil price ceiling in domestic supply program

JAKARTA (Reuters) - Indonesia said on Monday it had revised rules for its palm oil sector, raising the price cap for output sold under its “domestic market obligation” (DMO) scheme to encourage producers to improve supplies of cheap cooking oil. Under the DMO scheme, producers must sell some of their output locally at a capped price to be eligible for export licenses. However, supplies through the DMO scheme have fallen along with weak demand from overseas, leading to a decline in applications for permits. To improve domestic supply, the trade ministry raised the price cap to 15,700 rupiah ($1.01) per liter from 14,000 rupiah. It also lowered its volume target under the DMO scheme to 250,000 tonnes per month from 300,000 tonnes. “The price ceiling adjustment is one of our efforts to boost the DMO amid weak export demand,” Moga Simatupang, a senior official at the Commerce Ministry, told a news conference on Monday. Palm oil exports fell 4.26 percent from January to May compared to ...