The restriction on palm oil exports imposed by Indonesian President Joko Widodo to regulate food prices took effect on Thursday. India is the world's largest importer of palm oil, importing over half of the 700,000 tonnes it requires each month from Indonesia.
Officials from the Indian palm oil sector told Reuters that the restriction had stranded at least 290,000 tonnes of edible oil destined for India at ports and oil mills in the world's top producer.
According to authorities, the interruption in shipments caused by Indonesia’s decision to expand its export prohibition to include crude and refined palm oil may result in a vegetable oil scarcity in India, the world’s largest consumer. They went on to say that Malaysia, the world’s second-largest exporter, is already failing to fulfill rising demand.
"Our 16,000-tonne vessel is detained at the Indonesian port of Kumai," said Pradeep Chowdhry, managing director of Gemini Edibles & Fats India Pvt Ltd. Every month, Chowdhry's company purchases roughly 30,000 tonnes of Indonesian palm oil.
Companies are rushing to make purchases from Malaysia since they have very few choices.
However, in Kuala Lumpur, Sandeep Bajoria, CEO of Sunvin Group, a vegetable oil brokerage and advisory business, stated that it was unable to satisfy demand because Malaysian vendors were obligated to honour previous obligations and were unable to produce palm oil for timely shipping.
"There would be a market scarcity. There isn't any method to boost supplies "Govindbhai Patel, managing director of trading business G.G. Patel & Nikhil Research Company, was reported by Reuters as saying.
Widodo put an export restriction on practically all palm products, which are used in basics such as cooking oil, last week, claiming that people's need for inexpensive food outweighed profitability.
According to the AFP, the move increased his approval rating by four points to 64.1 percent in an independent poll of about 1,200 people conducted from April 20 to 25, recovering slightly from a low of 59.9% earlier this week but still below the record high of 75.3 percent he achieved in January.
Meanwhile, according to sources, Indonesia's palm oil industry group GAPKI is collaborating with government agencies and state-owned enterprises to guarantee that cooking oil is available and affordable.
In a statement, the organization expressed its hope that the government will take other steps to address rising cooking oil costs, warning that a protracted restriction on the export of crude palm oil and its derivatives would harm enterprises, smallholder planters, and refineries.
