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Problems linked to Jakarta’s palm oil policy will grow

Wednesday, May 25, 2022

Significance

The moratorium was designed to rein in prices of cooking oil domestically by increasing local supply. Jakarta has now reinstated mandatory domestic sales for palm oil companies, the way it was trying to ease the supply crisis before announcing the export ban.

Impacts

  • The authorities will work harder to crack down on improper labour practices at palm oil plantations.
  • Jakarta will face a challenge to repair diplomatic partnerships strained by the palm oil export ban.
  • Edible oil prices globally will likely remain volatile in the short term at least despite the ban’s lifting.

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