Exporters will be allowed to ship six times the volume of their domestic sales, eight times less than the current rate.
Indonesia will tighten palm oil export rules from January 1 by allowing fewer shipments abroad per tonne sold domestically, a move aimed at ensuring sufficient domestic supplies.
Under a new regulation reviewed by Reuters news agency and confirmed by an industry official, exporters will be allowed to ship six times the volume of their domestic sales, well below the current rate of eight times.
“To secure domestic supply, especially in the first quarter of 2023,” Septian Hario Setio, a senior official at the Department of Coordination of Maritime Affairs and Investment, said Friday.
Seto said the ratio will be periodically assessed by looking at the situation in the country, including cooking oil supplies and prices.
Indonesia earlier this year introduced export measures on palm oil products amid concerns about cooking oil prices spiraling out of control.
The short-lived ban on cooking oil exports from Indonesia has shaken the market and exacerbated existing global supply concerns.but it also led to a bloated domestic inventory.
Indonesia currently imposes so-called domestic market obligations (DMOs) that require businesses to sell part of their production locally in exchange for an export license.
During a meeting with the government last week, General Secretary of the Palm Oil Association of Indonesia (GAPKI) Eddy Martono said there were still concerns about the supply of edible oil, related to the government’s biodiesel program and the period Expect lower palm oil production in the first quarter. Indonesia is planning to increase the mandatory palm oil composition to 35% starting February 1.
The world’s most populous Muslim country will also celebrate Ramadan in March 2023, when demand for food including cooking oil is expected to increase, Eddy said.
While businesses will comply with the regulation, Eddy said new export rates need to be assessed regularly in the short term.
