INDONESIA- To curb the inadequate supply of cooking oil in the country, palm oil exporters will only export 6 times the volume they sell domestically instead of the 8 times ratio previously in place. 

Indonesia is the world’s largest palm oil producer, yet the country has been experiencing a palm oil availability crisis, causing the government to take serious measures to ensure sufficient domestic supply. 

The country has been experiencing a rise in palm oil prices, coupled with low availability of the product, which drives prices even higher. 

However, for the next three months, there may be a temporary relief for Indonesian citizens as the government requires 66% of the locally produced palm oil to be sold domestically. 

According to a Global Agricultural Information Network report from the Foreign Agricultural Service of the US Department of Agriculture (USDA), this move is likely to avail a projected 400,000 to 800,000 tonnes of Indonesian palm oil in the domestic market, as they export less palm oil from the country. 

Before imposing this measure, the government had initiated a 5-kg per person purchase limit, but the crisis persisted. 

There was fear that the country, one that largely comprises a Muslim population, would not have enough supplies for the Ramadan and Eid festivities.

Reduced exports to the EU thanks to deforestation regulation 

Exports of palm oil from Indonesia could reduce further because of deforestation regulations initiated by the EU. 

Authorities of Indonesia and Malaysia, the second largest producer of palm oil, recently met and will send a trade mission to the EU to discuss their views on deforestation.  

“We always strive to comply with regulations on the palm oil industry, but they must be fair and understand the situation in both countries where we try to help smallholders come out of poverty,” said deputy prime minister of Malaysia, Datuk Seri Fadillah.

The leaders of both countries are also pushing to have the Malaysian Sustainable Palm Oil (MSPO) and the Indonesian Sustainable Palm Oil certification (ISPO) gain recognition worldwide.  

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