World’s largest producer
Foreign countries no longer get palm oil – Indonesia stops exports
Working on a palm oil plantation: A young man carries a bundle of fruit over his shoulder on the island of Borneo.
© Christiane Oelrich/ / Picture Alliance
In Indonesia, palm oil has become so rare and expensive that the government fears popular protests and social unrest. Therefore, the export of the raw material has now been stopped.
Indonesia will stop exporting palm oil and other vegetable oils from this Thursday. President Joko Widodo justified the step last Friday with the scarcity of the raw material in the country. The export ban applies indefinitely. The country in Southeast Asia is considered the world’s largest exporter of palm oil.
In Indonesia, palm oil, which is mainly used to prepare food there, has been in short supply since November. At that time, exports rose sharply due to higher world market prices – which in turn further fueled prices. They have climbed even further because of the Ukraine war – Ukraine and Russia are among the largest producers and exporters of sunflower oil.
In Indonesia, the rise in palm oil prices sparked protests in the country. The government in Jakarta fears social unrest and destabilization of the island nation of 270 million people. When he announced the export stop last Friday, President Widodo said that the government would monitor developments closely until there was enough oil at affordable prices again.
Palm oil export ban is controversial
Economist Bhima Yudhistira, director of the Jakarta-based Center for Economic and Legal Affairs, criticized the decision on Saturday and warned of protests from importing countries. There is no need to stop exports altogether. Rather, the government must enforce a regulation according to which exporters have to sell 20 percent of their production on the domestic market. MP Deddy Sitorus from the ruling PDI-P party also warned that the export ban could jeopardize the future of smallholders and medium-sized palm oil companies in the country.
The export of palm oil was already limited in January. A price limit has been set in the country. In April, Widodo announced aid payments for the poorest to be able to buy oil.
Nevertheless, the shelves in supermarkets and the stalls in the markets are often empty. Across the country, people are queuing at outlets for discounted oil.
A few days ago, prosecutors arrested a high-ranking official at the Ministry of Commerce who is said to have granted export licenses for palm oil in return for a bribe. Company representatives have also been arrested.
Palm oil production is a major environmental problem
The red-brownish palm oil is extracted from the pulp of the oil palm. There is also palm kernel oil from the seed of the fruit. Palm oil is mainly used in Asia for frying and frying. However, it is also found in numerous foods, for example in margarine, chocolate, spreads containing cocoa, ice cream, baked goods, pizzas and other convenience products. Palm oil is also mixed into animal feed and detergents, soaps, cosmetics, candles and lubricants are high in palm oil. The raw material is also used for biofuel.
Indonesia has been criticized for destroying its rainforest for palm oil cultivation. The clearing of the primeval forest for palm oil plantations is considered a major environmental problem because the habitat for animal species, some of which are threatened with extinction, is irretrievably destroyed. That is why some companies deliberately avoid using palm oil in the manufacture of their products. However, since sunflower oil is now also threatening to become scarce due to the Ukraine war, many of these companies are faced with a dilemma.
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