Indonesia reduces palm oil exports to ensure supply at home
Indonesia, the world’s biggest palm oil producer, will cut its overseas shipments of the commodity, as it tightens a policy requiring companies to keep more supply at home.
The government cut the amount producers can export to six times the domestic sales requirement, down from eight times currently, Vietnam news agency (VNA) reported Budi Santoso, Director General of foreign trade at the Indonesian Trade Ministry, said.
The change took effect from Jan 1, it added.
VNA also reported Firman Hidayat, an official at the Coordinating Ministry for Maritime Affairs and Investment, said the Indonesian government wants to ensure ample domestic supply during the Ramadan and Aidilfitri holidays in April as production will be seasonally weaker in the first quarter.
On the contrary, the tightening of palm oil exports in Indonesia has affected the prices in Malaysia, the world’s second largest exporter of this commodity.
The move may encourage Malaysia to raise prices and exports.
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