Short-term win for Malaysia's plantation sector from Indonesia's palm oil exports ban

THE Malaysian plantation sector could benefit from Indonesia's move to ban its exports of palm oil, although analysts expect the long-term impact to be insignificant as the ban is unlikely to exceed 4 weeks.

In a video broadcast last Friday (Apr 22), Indonesian President Joko Widodo announced that the world’s largest producer and exporter of palm oil would ban exports from Apr 28 until further notice. He explained that the policy would help ensure abundant and affordable domestic cooking oil supplies, even as fears mount that the move could further worsen rising global food inflation.

News of the ban quickly shifted the market's attention to Malaysia, the next larger producer of the edible oil. Palm oil, one of the world's widely used edible oils, is also used as biodiesel feedstock.