Indonesia to restrict palm oil exports
Edible oil customers in South Asia, Africa would face brunt as demand is predicted to increase
JAKARTA (Reuters) - The world s vegetable oil supplies which are already under pressure from decreased production in Southeast Asia and Latin America have been expected to be further squeezed by an Indonesian initiative to restrict imports and increase domestic biodiesel usage.
With China relaxing Covid-19 restrictions and India increasing imports, edible oil customers, notably price-sensitive consumers in South Asia and Africa would face the brunt of the supply-side constraints that arrive just as demand is predicted to increase.
With prices of essential commodities like wheat, corn and soybeans reaching all-time or multi-year highs due to last year s rapid inflation, Indonesia s new limits present yet another obstacle for nations that import food.
According to the Indonesia Biofuel Producers Association this year s B35 requirement would use 11.44 million tons of palm oil.
More than half of the world s palm oil is produced in Indonesia, which tightened trade regulations this year by permitting exporters to transport just six times as much palm oil as they sell domestically.
In reaction to a new regulation that severely controls product sales in an effort to safeguard forests, Malaysia also had announced on Thursday that it could halt selling palm oil to the EU.