April 29, 2022 - 04:52 PM 289 views
The Russian-Ukraine war has already created negative waves in the
global economy, and now an unexpected Indonesian move to ban palm oil exports
will have adverse impacts on the global food market in the future. Natixis
Report's economists stated.
Indonesian ban will hopefully increase food prices.
A ban on palm oil exports was announced by the Indonesian
president, Joko Widodo. This ban covers both palm oil and crude oil exports.
The Indonesian government imposed the oil embargo to reduce rising food prices
and to quell local unrest.
the ramifications may toss the country's economy into disarray, pushing global
prices even higher.
The effects of increasing palm oil prices will be felt all around
the world. Food inflation is on the decline, which means lower purchasing power
It’s good for Indonesia because the oil export ban can reduce the
domestic cost of cooking oil. However, because palm oil exports are a critical
source of revenue for the Indonesian government, this could keep the Indonesian
currency (IDR) under pressure. In the meantime, imports are becoming more
expensive as the sinking IDR adds to cost pressure by allowing weaker foreign
exchange to pass through. As a result, while its ban on the export of palm oil
is well-intentioned, it may backfire.