Palm Oil Prices Rise 7% Amid Indonesia's Edible Oil Export Ban

[Image source=Yonhap News]

[Asia Economy Reporter Cho Hyun-ui] Following Indonesia's decision to ban exports of cooking oil and cooking oil raw materials, Indonesia being the world's largest exporter of edible oil, palm oil prices surged about 7%, and prices of other edible oils such as soybean oil also rose.

According to Bloomberg and others on the 25th, the July delivery palm oil price for Indonesian origin on the Malaysia Kuala Lumpur exchange at one point during the day rose 7.0% from the previous trading day to 6,799 ringgit per ton (about 1.95 million KRW). This is the highest level since the 11th of last month.

Market analysts reported that Indonesia, which accounts for about 60% of the world's palm oil supply, raised palm oil prices by triggering concerns over international supply-demand imbalances after announcing the export ban decision last weekend.

With the export ban on Indonesian palm oil edible oil and cooking oil raw materials such as 'RBD Palm Olein' being announced, the already soaring global edible oil prices, driven by the Ukraine crisis, are rising further.

Edible oil prices began to rise last year due to reduced palm oil production in Indonesia and Malaysia, drought-related decreases in Canadian canola oil, and reduced soybean production in Brazil and Argentina, and surged further this year due to the Ukraine crisis.

Ukraine and Russia account for 75% of the world's sunflower oil exports, but Russia destroyed Ukrainian ports and blocked export ships.

Major foreign media reported, "Immediately after Indonesia's announcement of the export ban on palm oil edible oil, soybean oil futures prices on the U.S. Chicago Mercantile Exchange surged 4.5%, reaching the highest level since 2008." Palm oil futures prices on China's Dalian Commodity Exchange rose 3%, and soybean oil futures prices rose 1.5%.

Industry insiders expect that Indonesia's export ban will further fuel price increases not only for palm oil but also for the four major edible oils: soybean oil, canola oil, and sunflower oil.

Bloomberg pointed out, "Indonesia's sudden export ban decision is raising concerns about food protectionism emerging after the Ukraine war, global food inflation, and the resulting risk of a hunger crisis."

This content was produced with the assistance of AI translation services.