Indonesia Bans Cooking Oil Exports by April 28, 2022

Arfi Bambani
Queue for cooking oil in Ngawi, East Java. (Photo: Beritajatim)
Queue for cooking oil in Ngawi, East Java. (Photo: Beritajatim) - President Joko Widodo announced that the Indonesian government would ban the export of cooking oil and its raw materials starting Thursday, April 28, 2022, for an undetermined time limit. This was taken as a Presidential Decree after chairing a meeting attended by ministers to discuss the people's basic needs, the President said in a statement broadcast on the official YouTube channel of the Presidential Secretariat on Friday.

"At the meeting, I decided that the government would prohibit the export of raw materials for cooking oil and cooking oil starting Thursday, April 28, 2022, until a time limit will be determined later," said the President.

The President promised to directly monitor and evaluate the implementation of the policy. "So that the availability of cooking oil in the country is abundant at affordable prices," said the Head of State.

The cooking oil prices increase and stock shortages in the market have occurred since the end of 2021. The government had tried to overcome this situation by tightening CPO exports and prioritizing meeting domestic needs.

The government is trying to control prices through Minister of Trade Regulation Number 6 of 2022 which was set on January 26 in the form of setting the highest retail price (HET) at Rp. 11,500 per liter for bulk cooking oil, Rp. 13,500 per liter for simple packaged cooking oil, and Rp. 14,000. per liter for premium packaged cooking oil. However, recently the policy was abolished because it failed to overcome the cooking oil scarcity in the market so the government only imposed the HET for bulk cooking oil of Rp. 14,000 per liter.

The Attorney General's Office on Tuesday (19/4) named four suspects in the alleged case of granting an export permit facility for crude palm oil (CPO) and its derivatives, including cooking oil, in January 2021-March 2022 which caused a shortage of cooking oil. The four suspects are the Director General of Foreign Trade (Dirjen Perdaglu) of the Ministry of Trade Indrasari Wisnu Wardhana, Senior Manager of Corporate Affairs at Permata Hijau Group Standly MA, Commissioner of PT Wilmar Nabati Indonesia Master Paulian Tumanggor, and General Manager of General Affairs of PT Musim Mas Picare Togar Sitanggang.

The Director General of Foreign Trade was named a suspect because he had issued export approvals related to CPO commodities and its derivative products to Permata Hijau Group, PT Wilmar Nabati Indonesia, PT Multimas Nabati Asahan, and PT Musim Mas.

Pros and Cons

Member of Commission VI Indonesia House of Representatives Mufti Anam appreciated President Joko Widodo's decision to ban cooking oil and cooking oil raw materials export. It proves that the state takes care of the people's needs.

"This policy is a proof that the state is here to take care of the people's needs, the state is here to put the interests of the people first, the state is here to fight the interests of CPO (crude palm oil) entrepreneurs and palm oil oligarchs who are hunting for money when prices soar in the global market," Mufti told reporters in Surabaya, Friday.

Mufti explained that the policies taken by President Jokowi are in line with his concentration in the DPR RI. "The point is that from the start I said that the government must flood the market first until the situation is normal, until this new affordable price is formed. Only then will the export faucet reopen," said Mufti, who is also the former Chairperson of the East Java Indonesian Young Entrepreneurs Association (HIPMI).

Jokowi's policy, said Mufti, could uphold Indonesia's sovereignty and capability as the world's largest supplier of palm oil, where about 30 percent of the world's CPO needs are supplied from the country.

Meanwhile, a member of Commission VI of the House of Representatives, Deddy Yevri Hanteru Sitorus, asked the government to review the moratorium or prohibition on exporting cooking oil and its raw materials. "Because in the end, this policy can harm small farmers and push prices up, including derivative products such as cooking oil," said Deddy in a written statement received in Jakarta, Friday.

According to him, the government's decision to ban exports of crude palm oil (CPO) and cooking oil would be appropriate if it was carried out in the short term. This can be understood as a step to ensure adequate supply in the country and reduce prices at the domestic level.

"But this can damage the CPO industry as a whole, the cooking oil industry as well; and this is detrimental to small farmers in the interior, especially small oil palm farmers, medium oil palm landowners, and oil palm plantation owners who do not have CPO processing factories, refineries or cooking oil factory. It should be remembered that around 41 percent of the palm oil industry players are small people. So this concerns millions of people and they will be the first to suffer as a result of this policy," the Indonesia Democratic Party of Struggle explained.

Tag # cooking oil # cooking oil export ban # crude palm oil # indonesia palm oil

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