Luhut Pandjaitan, a senior minister, expects that the country should speed up palm oil export while reassuring farmers and exporters after the permit process. The country has released around 302.000 tonnes of palm oil since the country restarted exports. Previously in April, the country had halted palm oil exports for the sake of controlling domestic prices on cooking oil.
On May 23, the government resumed palm oil exports again with few terms including to safeguard domestic supply. This is under Domestic Market Obligation or DMO where the producers should sell a portion first prior to the products at home. Meanwhile, the policy changes have caused some red tape tightening. It slowed down the issuance of export permission. As a result, industry groups and traders felt that it kept global palm oil prices soaring amid weak output from Malaysia.
Palm oil mills have halted buying palm fruits from Indonesian farmers due to the export ban. Indonesia Palm Oil Association officials argued that it would impact negatively on the farmers. The farmers in this case had conducted protests to recover price level after failing for as much as 75%. Luhut made sure that the acceleration measures would help palm oil price level rise if farmers still encounter low price levels.
Typically, Indonesia exports around 2.5 million tonnes of palm oil products per month. The current condition depicts that the government only allows an equivalent of 302.000 tonnes of cooking oil export under DMO. Furthermore, Indonesia’s economic ministry official Musdhalifah Machmud argued that the government has worked for particular adjustments. However, she declined explaining further details. So far, Indonesia imposes $375 per tonne levy of crude palm oil export at maximum. Luhut added that the government would continue to audit the palm sector to avoid future disruptions.
