PALM OIL - JAKARTA. Palm oil producers in Indonesia sold 360,150 tonnes of cheap cooking oil to the domestic market in February, its trade minister said on Wednesday, short of a government target designed to ensure supply to local consumers.
Indonesia, the world's top palm oil producer, shocked markets last year when it banned exports of the edible oil for several weeks, to address months of local cooking oil supply problems and stubbornly high prices.
Exporters must now sell a portion of their palm oil products at home at a capped price under a domestic market obligation (DMO) scheme. Indonesia raised the DMO volume by 50% to 450,000 tonnes per month for February-April, anticipating a jump in cooking oil demand ahead of Islamic festivities.
"This March we will enforce (the policy) to reach 450,000 tonnes," Trade Minister Zulkifli Hasan told a parliamentary hearing.
The volume increase was implemented as prices of simple-packing cooking oil surpassed a price cap of 14,000 rupiah ($0.9115) per litre.
Last month, Indonesia suspended some palm oil export permits until April, to encourage exporter to increase domestic supply and secure new permits. The DMO scheme allows exporters to ship six times the amount they sell locally.