Indonesia’s Palm Oil Export Curbs to Squeeze World Vegetable Oils Supplies

A move by Indonesia, the world’s biggest producer of palm oil, to restrict shipments and boost domestic biodiesel consumption is set to squeeze global vegetable oil supplies already undercut by lower output in Southeast Asia and Latin America, says a Reuters report on January 13.   
Edible oil buyers, including price-sensitive consumers in South Asia and Africa, will bear the brunt of the supply-side constraints that come just as demand is forecast to climb, with China easing Covid-19 controls and India boosting purchases, the report added.  A senior analyst at food and agribusiness research at Rabobank, Oscar Tjakra said the implementation of the B35 mandate in Indonesia this year will surely affect the global palm oil supply and demand situation which he now projects to be in slight deficit.
Meanwhile, the country’s energy ministry has delayed the implementation of the B35 mandate until February 01 to allow time to prepare supply and infrastructure.  Thus, the country would continue with its B30 blending programs which had been in place since 2020, and likewise maintain the total biodiesel allocation for domestic consumption of 13.15 million kiloliters.