Crude palm oil export ban will continue: Minister

JAKARTA (JP): The government has extended its export ban on crude palm oil (CPO) until a yet to be decided time, Minister of Industry and Trade Tunky Ariwibowo has announced.

Tunky said Monday night the export ban would remain until the market price of cooking oil began to stabilize. But he did not indicate when the price was likely to be stabilized again.

"If the price was stable and there was enough of a supply there would be no more complaints about inflated cooking oil prices and we would consider allowing exports again," Tunky was quoted by Antara as saying.

He was speaking after a meeting with Coordinating Minister for Production and Distribution Hartarto and State Logistics Agency head Bedu Amang.

He said, however, that olein and other CPO derivatives such as stearin and fatty acid would not be included in the ban in March.

A continued export ban will violate a government agreement signed with the International Monetary Fund last month to discontinue palm oil export restrictions, and restrictions on other commodities from March.

The IMF agreed to a US$43 billion bailout for Indonesia's ailing economy.

The meeting was part of a series of meetings the government has conducted in efforts to suppress the price of cooking oil -- a staple here -- from skyrocketing.

Last December, the government forbade the exporting of CPO, olein and other CPO derivatives for three months until March to ensure a domestic supply of cooking oil and stabilize its price.

The measure failed to stop cooking oil prices rising and food stores have run short of oil.

CPO producers are reportedly withholding their products to gain from sales overseas when exports are allowed again, while many retailers are reportedly stockpiling cooking oils for when prices go up again after the export ban is lifted.

Indonesia is the world's second largest producer of CPO after Malaysia with total supply this year projected to reach 5.9 million tons to supply a local demand of about 3.5 million tons.

In a similar development, Minister of Agriculture Sjarifudin Baharsjah said yesterday all olein production of state-owned PT Perkebunan Nusantara (PTPN) would be sold to retailers at a maximum Rp 3,300 per kilogram.

Sjarifudin said the olein would be marketed through ministry appointed distributors, which would sell the commodity at a set price.

CPO sells for about Rp 4,400 in the market currently.

Sjarifudin said the price may go down to Rp 3,000 per kilogram by next week.

PTPN now produces about 1.8 million tons of CPO a year. This amount of CPO can make about 1.5 million tons of olein (70 percent of CPO). (das/gis)