Indrawati Says Palm Oil Export Ban Will Hurt Other Countries, But Necessary

COUNTRY NEEDS FIRST

But Indrawati, a former World Bank managing director, said that as a political leader and policy maker food security issues needed to be defined first at the country level, then regionally and globally.

She likened the current food supply situation to the early weeks of the COVID-19 pandemic, when countries competed with each other for masks, medical protective gear and other critical supplies.

"Just like we were facing during the pandemic, we know this is not good in the medium and long term, but in the short term, you cannot stand in front of your people when you have the commodity which is needed by your people and you let (supplies) just go out" of the country.

Indonesia's move, which takes effect on April 28, caused prices of alternative vegetable oils to surge, with soybean oil hitting a record high on Friday. An Indian trade group called the ban "rather unfortunate and totally unexpected."

Read Also: Indonesia's Palm Oil Export Curbs Upend Global Edible Oil Markets

Indrawati said her government would analyze the impact of the measure on global and regional market dynamics.

For palm oil and other food commodities, she said the World Bank and other international institutions needed to focus on "supply side measures" to increase production.

But Indrawati said Indonesia has limited ability to increase palm oil production due to environmental concerns. Since 2018, the government stopped issuing new permits for palm oil plantations, which are often blamed for deforestation and destroying habitats of endangered animals such as orangutans.

Instead, Indonesia was focusing on improving infrastructure to allow producers to become more efficient and increasing production of other crops in high demand, including corn and soybeans, she said.