Exporters are allowed to ship six times their domestic sales volume, down from the current ratio of eight times.
Indonesia will tighten palm oil export regulations from January 1 by allowing fewer shipments abroad for every ton sold domestically in a bid to ensure adequate domestic supply.
Exporters will be allowed to ship six times their domestic sales volume, down from the current ratio of eight times, according to a new regulation reviewed by Reuters news agency and confirmed by an industry official.
“To secure domestic supply, especially for the first quarter of 2023,” Septian Hario Setio, a senior official at the coordinating Ministry of Maritime and Investment Affairs, said on Friday.
Seto said the ratio will be evaluated periodically by taking into account the domestic situation, including cooking oil availability and prices.
Indonesia introduced export controls on palm oil products earlier this year amid concerns about cooking oil prices spiraling out of control.
A short-lived ban on edible oil exports from Indonesia shocked markets and exacerbated existing concerns about global suppliesbut it also led to an explosion in domestic stocks.
Indonesia is currently imposing a so-called domestic market obligation (DMO), requiring companies to sell some of the output locally in exchange for export licenses.
In a meeting with the government last week, Indonesia Palm Oil Association (GAPKI) Secretary General Eddy Martono said there are still concerns over the supply of cooking oil, linked to the government’s biodiesel program and the expectation of lower palm oil production in Indonesia. the first quarter. Indonesia plans to increase the mandatory palm oil component to 35 percent from 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 rise, Eddy said.
While companies would comply with the regulation, Eddy said the new export ratio should be reviewed regularly in the near term.