Indonesia, Vietnam’s large vegetable oil supply market, lifts the ban on palm oil exports

Indonesia lifts ban on palm oil exports

The Vietnam Trade Office in Indonesia on May 20 said that, according to the statement of Indonesian President Joko Widodo (Jokowi), from May 23, 2022, this country will lifting the ban on the export of palm oil products (including CPO oil and cooking oil). Previously, the ban on palm oil exports was applied from April 28, 2022 with the aim of stabilizing domestic cooking oil prices, which were at a high level, and avoiding social unrest at that time.

According to President Jokowi, the country’s re-exportation of palm oil products is made on the basis of an abundant supply of cooking oil and the price of cooking oil in the domestic market has been adjusted down to 17,200 ($1.18)-17,600 Rp/liter ($1.21) (national average price) as well as taking into account the welfare of some 17 million workers across the palm oil industry supply chain.

The Indonesian government will continue to closely monitor the situation of the domestic cooking oil market to ensure an abundant supply at a reasonable price, and will reform the Palm Oil Fund Management agency towards a more streamlined approach. simple and effective, increasing the ability to respond to fluctuations in the domestic cooking oil market, in order to protect the people. At the same time, the Indonesian Government will also continue to expand the investigation and prosecution of those involved in the case of manipulating the domestic cooking oil market, causing harm to the people.

The Indonesian government had to give in to great pressure from this ban in the context of the price of palm raw materials falling sharply below the cost of production, causing a strong reaction from palm farmers and farmers. Many protests by palm farmers broke out.

Indonesia’s oil storage capacity (about 6 million liters) has nearly peaked when it has reached 5.8 million liters in early May 2022 and if the country does not allow oil exports again by the end of May 2022, then there won’t be enough space left.

According to the Indonesian Palm Oil Association, the country’s palm oil industry will have to shut down in mid-June 2022 if the export ban continues. The government is also under increased pressure from the National Assembly of this country to ask the Government to reconsider the decision ban on export of palm oil when more and more members of the National Assembly expressed their opposition to the application of this ban due to the losses it brings to workers in the palm oil industry as well as to oil production and business enterprises.

According to Indonesian statistics, Indonesia’s palm oil production in 2021 will reach 46.88 million tons, down 0.31% compared to 2020 with an output reached this year of 47.03 million tons. Domestic consumption of palm oil reached 18.42 million tons, up 6% from 17.34 million tons in 2020.

Indonesia’s export of palm oil and palm oil products in 2021 reached 34.2 million tons, up 0.6 percent compared to 2020 (export volume was 34 million tons). The export value of palm oil in 2021 will reach 35 billion USD, up 52% ​​compared to 2020 (at 22.9 billion USD) due to the sharp increase in palm oil price in 2021.

In 2022, Indonesia strives to reach an output of 49 million tons of palm oil and 4.8 million tons of oil from palm kernels. Total oil production is expected to reach 53.8 million tons, up 4.87% compared to 2021 (reaching 52.3 million tons of which 46.88 million tons of oil and 5.42 million tons of oil from palm kernels) . The country’s oil demand forecast in 2022 is 20.59 million tons. Oil output is expected to be exported at 33.21 million tons.

Before Indonesia lift the ban on palm oil exports crude oil (CPO) and cooking oil, enterprises importing these groups of goods from Vietnam need to urgently contact Indonesian exporters (partners) to resume orders.

Businesses also need to closely monitor updates on policies, management and administration related to CPO crude palm oil and cooking oil at the website of the Ministry of Trade of Indonesia – www.kemendag.go. id; Indonesian Palm Oil Association-www.gapki.id (or through the Vietnam Trade Office in Indonesia).

Indonesia is one of Vietnam’s major vegetable oil supply markets with the import value of this commodity group in 2021 reaching 711 million USD.