Palm oil prices soar as Indonesia widens export ban

Indonesia left the markets in a shock after the chief economic minister on Wednesday widened the scope of its export ban on raw materials for cooking oil to include crude and refined palm oil. The palm oil prices surged to 7,000 ringgit per tonne - not too far away from the all-time high of 7,200 ringgit. The soy oil prices, in Chicago, have hit record highs yet again. The announcement flipped the minister's statement a day earlier, in which he had said the export ban would only cover refined, bleached, and deodorized (RBD) palm olein.

It's not about the period that the ban will continue. It is about ensuring that the prices are controlled.

The markets also believe that the mounting pressure from buyers to resume shipments will make it happen faster. There is limited infrastructure to store surplus oil in Indonesia. So this may perhaps not last for more than 3-4 weeks, but until then very high prices on edible oil to continue in the international markets and India.