Cooking oil futures soar on Indonesia export ban

US soyoil futures surged to a record high on Wednesday after Indonesia broadened an export ban on raw materials for cooking oil as it seeks to cool food inflation, traders said.

“The move dramatically tightens an already tight global supply of edible oils that saw global prices surge when the Russian invasion of Ukraine took Ukrainian sunflower oil supplies off the market,” StoneX chief commodities economist Arlan Suderman wrote in a client note.

Indonesia’s chief economic minister on Wednesday said the country was widening the scope of its export ban to include crude and refined palm oil, among other products. Previously, the ban was only due to include refined, bleached, and deodorised palm olein.

President Joko Widodo said in a separate statement that people’s need for affordable food trumped revenue concerns for now.

“Once domestic needs have been met, of course I will lift the export ban because I know the country needs taxes, foreign exchange, a trade balance surplus, but meeting the people’s basic needs is a more important priority,” he said.

Palm oil markets were jittery ahead of the ban and Indonesia deployed navy ships and personnel in an effort to thwart illegal shipments.

Palm oil futures on the Malaysia exchange surged by 9.8% on Wednesday, as some market participants feared exporters in Indonesia, the world’s biggest palm oil producer, would not be able to get their products onboard vessels before the ban came into effect. (Reuters)