JAKARTA, Feb 6 (Reuters) – Indonesia will suspend some palm oil export licenses to secure domestic supply amid rising cooking oil prices ahead of Islamic holidays, the minister said Luhut Pandjaitan on his official Instagram account.
He said palm oil exporters had accumulated large shipment quotas since last year and now had little incentive to supply the domestic market.
Indonesia issues export quotas for palm oil companies that have sold some of their products domestically, under a policy known as the “domestic market obligation” ( BMD).
The DMO currently allows export volumes of six times what companies have sold at home.
Luhut said “exporters will be able to use these export rights once the situation calms down.”
Firman Hidayat, an official with the Coordinating Ministry of Maritime Affairs and Investment, said about a third of the total export quota could be used now, while the rest could be used after May 1.
Exporters could increase the quota when they increase domestic market supply, he said.
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Reporting by Bernadette Christina Writing by Fransiska Nangoy Editing by Ed Davies
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