By Fransiska Nangoy

JAKARTA, Reuters – Indonesia will ban the export of palm oil effective from April 28th until further notice. This is after President Joko Widodo declared on Friday that he would halt shipments of cooking oils and raw materials to curb rising domestic prices.

An earlier Indonesian move to limit palm oil exports was made in January. It was lifted later in March. This caused historic prices for the commodity.

The oil’s main ingredient is palm oil. Indonesia is the largest producer and exporter of this oil. This has caused global market turmoil.

Jokowi (as the president is commonly known) stated that the policy was intended to guarantee home availability of food products in a brief video broadcast.

He stated that he would monitor and review the effectiveness of the plan to ensure cooking oil is readily available on the national market.

U.S. soyoil futures jumped more than 3% to hit a record high of 84.03 cents per pound after Indonesia announced the ban.

This move will affect consumers in India’s largest buyer, but also globally as palm oil is the most widely consumed oil worldwide, Atul Chaturvedi (president of the Solvent Extractors Association of India) told Reuters.

“This was a completely unplanned and unfortunate decision,” he stated.

The sky is the limit now for edible oil prices. “Buyers were banking on palm oils after Ukraine’s war.” A dealer at a global trading company based in Mumbai said.

They (buyers) have no other choice as the soyoil supply is also very limited.

GAPKI’s Indonesian palm oil association did not immediately reply to our requests for comment.

The retail price of cooking oil was generally above 20,000 Rupiah per Liter at home. According to price monitoring pages, the prices of cooking oil have almost doubled in some Indonesian provinces over the last month.

Students have held demonstrations in many cities in Indonesia over the recent high prices of cooking oil.

Although the Indonesian government set a 14,000 rupees per litre limit for bulk cooking oil sales, officials said that some retailers are selling more than this.

An investigation by the state is being conducted into allegations of corruption surrounding sought-after export permit issues. A senior official from the trade ministry and three executives in palm oil were named by the Attorney General’s Office as suspects last week.