Recriminations fly as Indonesia ends palm oil export ban hurting producers

Long lines of trucks trying to unload palm fruit formed outside Indonesian processing mills last week, illustrating the growing cost of a palm oil export ban by the world’s biggest producer.

The trucks were stuck for days as storage space for palm oil neared capacity and, with local crop prices slumping by 70 per cent, farmers took to the streets to demand a policy change.

President Joko Widodo has now agreed to lift the export ban, despite a bid to flood the local market with palm oil failing to bring down the price of cooking oil to a government target.

“Ultimately, an increasing realisation that the export ban was starting to hurt palm oil producers without benefiting the end-consumers all that much prompted the reversal,” Mr Wellian Wiranto, an economist at OCBC Bank in Singapore, said in a note.

A palm oil farmer in West Sulawesi told Reuters trucks in his area had been stuck for days as farmers desperate to try to limit losses bypassed agents and offloaded their crop.