INDONESIA: Ban on Export of All Crude and Refined Palm Oil Products

Indonesia has imposed a temporary export ban on all palm oil products, starting on 28 April 2022. Initially, the ban only covered refined products, but was extended to crude palm oil, which is used in a wide range of products such as confectionery, food products, detergent, cosmetics and shampoo. A statement by Indonesian President Joko Widodo (Jokowi) said that the ban will remain until the local price of bulk cooking oil is reduced to IDR14,000 (US$0.96) per litre. 

The move is likely to cause major supply chain disruption across Asia and beyond. Palm oil accounted for 35% of global vegetable oil production in 2021, according to USDA figures, with Indonesia accounting for about 60% of global production. Impacts may be particularly severe in Asia, with India, China and Pakistan among the largest importers from Indonesia.

The sudden ban makes it unlikely that Malaysia, the second biggest palm oil producer at around 25% globally, will fill the shortfall in the near future. In the cooking oil market, the supply of alternatives are already under pressure due to the Russian-Ukraine conflict affecting sunflower oil production.