Palm farm in Sumatra, Indonesia (Maekyung DB)

Indonesia “Can export palm oil crude oil”… Cooking oil price plunged ‘back in place’

Palm farm in Sumatra, Indonesia (Maekyung DB)

Indonesia, the world’s largest exporter of palm oil, is expected to calm the global edible oil crisis as it is known that palm oil crude oil is excluded from the export ban. On this news, domestic edible oil-related stocks plummeted all at once, and there is an atmosphere where they are recovering.

On the news of the suspension of Indonesia’s palm oil exports, Sempyo rose sharply by hitting the upper limit for two consecutive trading days, but on the 27th, it fell 22.63% from the previous trading day, ending the transaction at 72,500 won. Shinsong Holdings also closed at 12,500 won, down 21.10%, and Sajo Daerim also closed at 33,900 won, down 8.75%. As time passed, the decline increased.

Earlier on the 23rd (local time), Indonesian President Joko Widodo announced that he would ban the export of cooking oil and raw materials for cooking oil from the 28th. This is because the demand for palm oil in Indonesia outstrips the supply and the need to lower the price.

However, as detailed items were not disclosed, the prevailing speculation was that palm oil would be included in the export ban. Since Indonesia accounts for 60% of the world’s palm oil supply, it has been pointed out that a global palm oil crisis is inevitable. Stock prices of domestic edible oil-related companies also rose sharply on expectations of price increases. Sempyo recorded the upper limit for two consecutive trading days on the 25th and the 26th, and Shinsong Holdings also surged by more than 17% on the 26th.

However, according to foreign media such as CNBC Indonesia on the 27th (local time), the Indonesian Ministry of Agriculture and Forestry said in an official letter to the local government, “RBD palm olein is excluded from the planned export ban of palm oil, except for crude palm oil (CPO). It is said to contain “included.” RBD palm olein can be obtained from RBD palm oil produced by refining, bleaching, and deodorizing (RBD) crude oil extracted by pressing palm fruits. After the RBD palm oil fractionation process, it is separated into a solid part palm stearin and a liquid part palm olein.

Accordingly, Bloomberg News reported, “RBD palm olein is different from palm oil crude oil in that it is a material that has already been processed.” “Indonesia’s export ban is limited to RBD palm olein. export,” he said.

Even so, there is also a warning that vigilance must not be relaxed. In the end, it is pointed out that since palm oil crude oil is a raw material for RBD palm olein, there is a constant concern that palm oil crude oil will be added to the prohibited items. Reuters also predicted that the export ban could expand if the export ban was not implemented to meet demand in the domestic market. A high-ranking Indonesian government official told Reuters that “RBD palm olein export is currently banned, but if domestic supply is insufficient, it is possible to ban the export of palm oil crude oil or RBD palm oil.”

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