Nusa Dua, Indonesia – Indonesia will continue its domestic market obligation (DMO) for palm oil into 2024 to maintain the price stability of cooking oil, Trade Ministry official Isy Karim said on Thursday.
Indonesia, the world's biggest palm oil producer, imposed the DMO policy last year to rein in soaring prices of cooking oil. Under the scheme, producers are only allowed to export once they have sold a portion of their products to the domestic market.
The ratio of exports to domestic sales will also be maintained at the current level, where palm oil companies are allowed to export four times the volume they have sold through the DMO mechanism, Isy told an industry conference at Indonesia's Bali island.
He said there were still occasional shortages of cheap cooking oil in the domestic market and higher prices in the eastern parts of Indonesia, often reaching above the government-set price cap of 14,000 rupiah ($0.8835) per litre.
Isy also said a number of companies have not been fulfilling their DMO requirement.
The government targets crude palm oil supply of 300,000 metric tons per month from the DMO programme to be supplied as cheap cooking oil.
"We ask that the DMO fulfilment, which is averaging 87 per cent of the target, be increased because there are fulfilment by several companies that are quite low," Isy told reporters on the sideline of the conference.
There were at least 6.7 million tons of outstanding export quota as per last week, he said.
Indonesia shocked the global vegetable oil market last year when it banned exports of all palm oil products for three weeks to control domestic prices, sending prices soaring.