Indonesia’s commerce minister said on Wednesday that he expects cooking oil prices to stabilise after a subsidised supply scheme reaches 10,000 outlets across the country.
On Tuesday, the commerce ministry and state food corporation ID Food began a programme that allows low-income households to purchase up to two litres of cooking oil each day for 14,000 rupiah ($0.95) each. According to Trade Minister Muhammad Lutfi, the programme had reached 1,200 locations as of Wednesday and was on track to reach 2,500 by the end of the week.
On April 28, Indonesia suspended exports of crude palm oil and its derivatives in the hopes of replenishing the domestic market with the essential food supply, but prices have remained high.
According to Lufti, having affordable cooking oil at home is a prerequisite for any discussions about lifting the export prohibition.
“Hopefully, by reaching 10,000 locations across the country at the earliest opportunity we can stabilise (cooking oil) affordability and availability all over Indonesia,” Lutfi said, adding that that many locations would represent around 60% to 70% of the Indonesian market.
“We hope we can reach stability at the earliest opportunity and only then we can talk about export relaxation,” he added.
The restriction on palm oil exports will be repealed, according to government officials, if the national price of bulk cooking oil falls to 14,000 rupiah per litre. According to ministry data, the average price per litre was 17,200 on Tuesday.
Indonesia is the world’s largest exporter of palm oil, and its decision to halt exports has startled global vegetable oil markets, which had previously lost a significant amount of sunflower oil owing to the Ukraine conflict.
Hundreds of palm oil farmers organised a rally in Jakarta on Tuesday, demanding that the export ban be lifted as mill storage became full and refiners stopped buying palm fruits.
(Adapted from WDCTV.News)