JAKARTA – The Indonesian government has cut the export ratio of crude palm oil (CPO) and its derivative products since January 2023 and increased the portion of domestic market obligation (DMO) of CPO, the raw material to produce cooking oil, to control supply and prices during the fasting month of Ramadan and the celebration of Eid al-Fitri later this month.

The Indonesian Palm Oil Association (GAPKI)  Chairman Eddy Martono said that the government’s palm oil export limitation policy should be evaluated after the celebration of Eid al-Fitri later this month (April 2023).

He said that if the need for exports increase, while domestic demand already fulfilled, then business players asked the government to ease the DMO policy.

“This is also aimed to avoid oversupply at the local market, while the needs for exports are limited,” Eddy told Kontan.co.id on Wednesday, 5 April 2023.

According to him, the latest export limitation policy has not yet impacted the national palm oil industry. “Currently, the global demand for palm oil is also declining. As long as the policy being implemented, there will be no problem with the exports and the domestic supply,” said Eddy.

It was reported previously that the government has cut the ratio of export quota of palm oil producers to six times of Domestic Market Obligation (DMO). Initially, the ratio of CPO export quota was 8 times of the palm oil DMO or 1:8.

The new government policy was aimed to ensure the supply of palm oil for cooking oil production at domestic market during the fasting month of Ramadan and the celebration of Eid al-Fitri later this month. (*)

Source: KONTAN.CO.ID