This is relief for an entire sector of the global economy.

Indonesia will authorize the resumption of palm oil exports on Monday, the ban on which since the end of April had destabilized the vegetable oil market, with prices already at their highest since the war in Ukraine.

“Given the supply and situation of cooking oil, and taking into account 17 million people employed in the palm oil sector (…) I have decided that the exports of cooking oil will be able to resume on Monday, May 23,” the Southeast Asian country’s President Joko Widodo said in a brief statement posted online on Thursday.

A spike in cooking oil prices

Indonesia, the world's largest producer of palm oil, decreed a ban on oilseed exports on April 28.

This decision was taken in the face of a shortage and soaring prices of cooking oil, which threatened to lead to social tensions.

The most modest consumers thus had to wait for hours in front of oil distribution centers at subsidized prices in many towns across the country.

"Even if exports resume, the government will strictly observe the situation to ensure that demand is met at an affordable price," the president said.

Indonesian producers had demonstrated

In announcing the suspension of exports, Joko Widodo stressed that supplying the Indonesian population was "the highest priority".

The announcement, which helped push vegetable oil prices to historic highs, was criticized as Ukraine, which accounted for 50% of the world's sunflower oil trade, is also unable to export due to the war.

Indonesian palm oil producers had protested last week in central capital Jakarta and other cities, complaining that palm fruit prices had fallen drastically.

The wholesale price of cooking oil has fallen from around 20,000 rupees (1.35 USD) per liter before the ban to around 17,200 rupees (1.17 USD) per liter now, but not as much as expected by the authorities.

Storage capacity saturated

The country of 270 million inhabitants suffers from problems of distribution and retention of stocks, while producers often prefer to sell their shipments internationally to take full advantage of the rise in prices.

The palm oil sector welcomed the news of the resumption of exports with relief, especially as storage capacities are approaching saturation.

“The situation on the ground is very difficult because the tanks are all full.

We hope that with the resumption of exports, palm oil production can return to normal,” Eddy Martono, secretary general of the Indonesian Palm Oil Producers Association (GAPKI), told AFP. , which represents the heavyweights of the sector.

34.2 million tonnes exported last year

The president of the Palm Oil Plantation Operators Association, Gulat Manurung, pledged to meet the national demand.

“We, palm oil plantation operators, promise to help ensure that there is sufficient supply of cooking oil in the domestic market,” he said.

Indonesia accounts for some 60% of the world's palm oil production, one third of which is consumed on its national market.

It exported 34.2 million tonnes last year for edible oil but also for the manufacture of a wide range of products, from cosmetics to food products.

Its biggest export customers are India, China, the European Union and Pakistan.

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  • War in Ukraine