Indonesia will remove export restrictions on palm oil products and raise its export levy instead, its trade minister said on Thursday, only a week after the world’s biggest exporter of the edible oil shocked markets by further tightening its curbs.

The Southeast Asian country has since last week required companies to sell 30% of their planned exports of crude palm oil or olein at home, up from 20% imposed in January, under a so-called domestic market obligation (DMO) aimed at ensuring local supply amid soaring cooking oil prices.

The Southeast Asian country has since last week required companies to sell 30% of their planned exports of crude palm oil or olein at home, up from 20% imposed in January, under a so-called domestic market obligation (DMO) aimed at ensuring local supply amid soaring cooking oil prices.

Although the policy increased supply at home, consumers complained that cooking oil was not available at many retailers across the country.

The government this week removed price caps on packaged cooking oil while providing subsidy for bulk cooking oil.

Explaining the decision, Lutfi said there was a price disparity between the DMO and market price that was being exploited. He did not elaborate.

He also told the hearing Indonesia had issued export permits for 3.5 million tonnes of palm oil and its refined products in the past 30 days.
Source: Reuters (Reporting by Bernaddette Christina Munthe; Writing by Martin Petty; Editing by Kanupriya Kapoor, Fransiska Nangoy)