Indonesia government has issued a Minister of Trade’s Regulation No 22/2022 on Temporary Export Ban on CPO, Refined, Bleached, And Deodorized Palm Olein, and Used Cooking Oil. The regulation was issued to fulfil the national need for cooking oil as an important need for daily necessities.
Indonesia as the biggest producer for CPO has enough capacity to meet domestic demand and it was ironic that the country is facing cooking oil shortages. On the other hand, palm oil futures in Malaysia exchange surge by 9.8% on Wednesday (27/04). US soyoil also taste the surge by 4%.
As the biggest producers of CPO and how the capital market react, many global actors in the industry related to CPO will be affected highly by the policy that Indonesia has issued. The global dealer and local palm oil companies might have to pay the price for the previously policy flip-flops that resulted in corruption cases.
The supplies and demand of global CPO market in the month of May will face challenges for global dealers as well as local CPO companies. Despite the unknown of how long the temporary ban will take effect, but the ban will likely be lifted when the cooking oil price in Indonesia return to normal.