Indonesia to curb palm oil exports ahead of Eid holiday

Indonesia will introduce fresh curbs on vegetable oil exporters to boost domestic cooking oil availability by 50pc ahead of the Eid al-Fitr holiday at the end of April, a government official said.

Palm oil producers and refiners will have to temporarily surrender two-thirds of the export quotas they currently hold after having already sold a proportion of their cooking oil production to the domestic market under Indonesia's domestic market obligation (DMO).

The government will return these allowances in stages, starting from after Eid al-Fitr holiday on 1 May, coordinating minister for maritime affairs and investment Luhut Binsar Pandjaitan said at a virtual stakeholder meeting on 6 February.

In the meantime, exporters will be allocated export permits on a monthly basis based on their past sales and policy compliance. Allocations for February have already been announced, a market participant said at the meeting, but these were not publicly available.

Sellers must still fulfil the current 6:1 DMO requirement to be able to export their permitted volumes — meaning they must sell 1,000t within the country before they can export 6,000t.

The DMO and domestic sales price for cooking oil will likely be adjusted again in future to stabilise the domestic market, Pandjaitan said.

By Lauren Moffitt