Indonesia tightens restrictions on palm oil exports to 30% of sales

The tighter restrictions aim to ensure that cooking oil prices at home remain affordable to consumers, said Indonesian trade minister Muhammad Lufti. PHOTO: REUTERS

JAKARTA (REUTERS) - Indonesia will expand its mandatory domestic sales of palm oil to 30 per cent of planned exports by companies from 20 per cent currently starting from Thursday (March 10) as part of efforts by authorities to contain cooking oil prices, Trade Minister Muhammad Lutfi said.

The world's biggest crude palm oil producer in late January first moved to restrict exports of the vegetable oil after prices of cooking oil shot up more than 40 per cent at the start of the year amid a surge in global prices.

The tighter restrictions on exports aim to ensure that cooking oil prices at home remain affordable to consumers, Mr Lutfi said, and the rule would remain in effect until the "condition normalises".

The minister said he considered a normal condition to be when cooking oil was readily available on the shelves of shops and was not offered above a maximum retail price set by the government.

"We are prioritising...Indonesia," Mr Lutfi told a news conference on Wednesday.

The government would review the policy after six months to determine whether it needed to be adjusted, he added.

The benchmark palm oil price in Malaysia has surged on export restrictions by Indonesia, with the crisis in Ukraine, which has cut supplies of sunflower oil, further fuelling the rally by squeezing supplies of globally vegetable oils.

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