Indonesia said on Thursday that a month-long restriction on palm oil exports will be lifted, citing improvements in supply and domestic bulk cooking oil prices. Exports will restart on Monday, according to President Joko Widodo.
The world's major exporters of palm oil are Indonesia and Malaysia, which rely heavily on the commodity. They produce 85% of all palm oil in the world.
The war in Ukraine, which produces over half of the world's sunflower oil in addition to 25% from Russia, has raised pressure on the worldwide supply of cooking oil.
After Indonesia restricted the export of cooking oil and its raw materials to relieve local shortages and keep prices from rising, palm oil prices soared by 200% or more.
In Indonesia, palm oil is the most extensively used vegetable oil, and despite being the world's largest producer, the country has been experiencing a cooking oil crisis for months due to weak regulation and producers' unwillingness to sell domestically.
About 60% of the world's palm oil is produced in Indonesia, with one-third used in the country. Its biggest exporters are India, China, the European Union, and Pakistan.
Widodo stated during a press conference that if the price of bulk cooking oil reaches 14,000 rupiah ($0.96) per litre, the restriction would be lifted. He stated that it has not yet met the objective, but that it will in the coming weeks as more palm oil becomes available.
"I have determined that the export of cooking oil will resume on Monday, May 23," Widodo stated, "based on the present supply and pricing of cooking oil and considering that there are 17 million people in the palm oil business, both working farmers and other supporting staff."
According to him, the monthly demand for bulk cooking oil in the United States is over 194,000 tonnes.
Before the export ban, the monthly supply was 64,500 tonnes, but it has now more than tripled to nearly 211,000 tonnes.
Law enforcement authorities are looking into claims of irregularities and fraud in the distribution and manufacturing of cooking oil, he added.
