Soyoil futures surge as Indonesia bans palm oil exports to increase supply

Indonesian President Joko Widodo in a video broadcast announced that the country will be banning palm oil exports until further notice from April 28. The policy announced was made keeping in mind the availability of food products in people's homes. He said that he would personally be monitoring the situation of cooking oil and its raw materials so that it becomes affordable for the masses once again.

As soon as Indonesia announced the ban, there was a more than 3% jump in the U.S soyoil futures to 84.03 cents/pound.

Atul Chaturvedi, trade body Solvent Extractors Association of India (SEA) President, stated that the move is unfortunate and unexpected and will hurt India and consumers globally. India is the biggest buyer of the most consumed oil globally (palm).


Prices of crude palm oil globally have increased drastically, and this oil is used as cooking oil in Indonesia. The demand is high, and the supply is low from producers in Malaysia and Indonesia, the top producers. It is also a result of a move by Indonesia in January, which restricted the export of palm oil before lifting it in March.

The edible oil markets worldwide have been affected by the Russia-Ukraine war as sunflower oil shipments have been cut off from the region. While Russia is calling this a "special operation." Since the Russian forces invaded Ukraine, shipping has been affected severely. 76% of the world's sunoil export takes place through the Black Sea and commercial shipping.

A dealer in Mumbai has stated that the sky is the limit for edible oil prices now.

Indonesia supplies more than half of the world's palm oil and has stopped issuing permits for new palm oil plantations since 2018. It is done because, allegedly, it results in deforestation and the destruction of the habitats of animals that are endangered, such as the orangutan.

GAPKI, the palm oil industry association, will be meeting post the President's announcement.