Indonesia has put an end to the levied export duties on the exports of palm oil from the country, in order to boost the exports and take out from the high inventories of produced palm oil domestically.
The decision from the Indonesian government comes after Indonesian palm oil producers were found to be struggling to keep up with the high inventories. Many experts believe that this might further down the prices of the commodity.
The Top Exporting Country
Palm oil is an edible vegetable oil that is a commonly available commodity in the group of oils. As per WWF, oil is a productive crop and has a greater yield at a low cost. Palm oil is found nearly everywhere in the world, in about 50% of the packaged products, according to WWF.
Palm oil exports account for nearly one-third of global oil exports from the largest oil producers in the world. Indonesia and Malaysia account for the largest share of palm oil exports, for about more than half of the world’s palm oil exports. Below are the top exporting countries of palm oil.
Palm Oil Export Ban After-effects
The announcement by the Indonesian government to ban the exports of palm oil to other countries created a stir. On April 24, the ban was imposed and after a period of about three months, the ban was lifted.
However, the affected countries suffered significantly as aforementioned, Indonesia is the world’s top exporter of palm oil. The Southeast nation itself faced a huge pile-up of high inventories for palm oil which is need to be allocated properly now.
The announcement of the palm oil export ban caused many countries to lose their biggest source of palm oil. Among the affected countries, most countries consist of the neighbouring regions to Indonesia, as the top exporting countries for Indonesia’s palm oil are in Asia.
Palm Oil Exports Boost
The Indonesian government announced the exemption of the levied export duty on the exports of palm oil till August 31. From the beginning of September this year, a further levy on palm oil exports. The new levy of export duty on crude palm oil will rate between $55 and $240 per ton.
The exemption is meant to boost the exports of palm oil from the Southeast Asian country, in the wake of the found high inventories of palm oil. The table below shows the quarterly exports of Indonesian palm oil for a time period of 1 year and 5 months, as per the data available.
The imposed ban on the exports of palm oil by the Indonesian government was a temporary relief in order to curtail the domestic prices of palm oil. The new levy of export duty on palm oil exports from Indonesia will be announced by the end of August.