Govt bans exports of CPO products

Govt bans exports of CPO products

JAKARTA (JP): The government moved further to stabilize
cooking oil prices by prohibiting the export of all commodities
derived from crude palm oil (CPO), including those not consumed
locally, starting yesterday.

The move, which was criticized sharply by palm oil producers
as a capricious policy, was disclosed by Director General of
Domestic Trade Ilchaedi Elyas to CPO producers at a meeting in
Medan yesterday afternoon.

"We fully understand and support the government's effort to
stabilize the price of cooking oil as a basic foodstuff, but that
should not mean a license for the government to harass us with
inconsistent policies," a CPO producer in Medan told The Jakarta
Post.

The producer, who also attended the meeting with Elyas, but
who asked for anonymity, recalled that the latest measure was the
third ruling imposed by the government on CPO trade over the past
two months.

"We find it quite strange that the government does not ban the
export of coconut oil, which is widely consumed as a cooking
oil," the businessman said.

Coconut oil is manufactured largely by the Salim Group which
is also a major producer of CPO.

Last November, the Ministry of Industry and Trade imposed an
export quota on CPO, refined bleached deodorized palm oil, crude
olein and refined bleached deodorized olein amounting to 20
percent of total production.

But less than three weeks later, the government suddenly
decided to prohibit the export of all four CPO products starting
Jan. 1, claiming the previous measure failed to stabilize cooking
oil prices.

M. Nafis Daulay, chairman of the Association of Indonesian
Cooking Oil Producers, said at the meeting with Elyas that the
latest measure would severely hurt domestic producers.

The latest ruling prohibits the export of all commodities
derived from CPO, including fatty acids, stearin and palm kernel
oil, which are not consumed locally.

"We don't understand why palm kernel oil, stearin and fatty
acids, which are not used for making cooking oil, are also banned
from exports," Daulay complained in Medan after the meeting.

Coconut oil remained free for exporting, Daulay added.

He said the blanket ban on the export of all CPO-based
commodities might disturb cooking oil production because mills
would be flooded by stearin, the byproduct of CPO refining into
cooking oil (olein).

"Our storage tanks may soon be overflowing with stearin from
our olein-refining process and that may force us to stop olein
production," Daulay said. (vin)