Indonesia, the world’s largest producer of palm oil, is set to lift its ban on agricultural exports starting Monday, which is expected to lead to lower prices for cooking oil worldwide.
Southeast Asia, which accounts for nearly 60 percent of world palm oil production, imposed large-scale restrictions on exports of palm oil products in late April as prices for cooking oil rose at home. This decision exacerbated the global shortage of edible oils after the war in Ukraine stopped the export of sunflower oil from this country.
Indonesia’s actions have become one of the most significant examples of trade protectionism, which has pushed food prices around the world. This was followed by other similar actions, such as India’s ban on wheat exports.
Indonesian President Joko Widoda said on Thursday that weeks after his decision to ban palm oil exports, domestic prices for cooking oil had fallen by about 10% and local offerings were richer. However, prices remain stubbornly higher than the government has planned at around $ 1 per liter, causing difficulties for many Indonesians.
The decision to resume trade took into account the country’s 17 million palm oil workers, Mr Vidoda said. Earlier this week in the Indonesian capital, Jakarta, palm oil farmers staged a protest to lift the export ban. “Although exports are open, the government will continue to monitor closely to ensure that supplies are available at affordable prices,” Mr Vidoda said.
Like many leaders around the world, Mr. Widodo is struggling to find solutions to rising inflation. In a survey in early May of about 1,200 Indonesians conducted by Indikator Politik Indonesia, three-quarters of participants said oil prices were too expensive. Anes Trini, a retiree from Jakarta, hoped the ban on exports would lead to a sharp drop in prices. “It’s frustrating when the price hasn’t fallen yet,” she said.
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