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Indonesia seizes tanker over palm oil export ban violation

JAKARTA (AFP) – The Indonesian Navy has seized a tanker that was carrying palm oil out of the country in violation of an export ban, a spokesman said on Saturday.

Indonesia, the world’s largest producer of palm oil, prohibited its export last week to rein in skyrocketing domestic prices and shortages.

An Indonesian warship intercepted the Singapore-flagged MV Mathu Bhum on Wednesday as it headed for Malaysia, Navy spokesman Agung Prasetiawan said.

“The ship was carrying 34 containers containing refined, bleached, deodorised palm olein. This is the type of material that is temporarily prohibited for exports,” he added.

Indonesia produces about 60 per cent of the world’s palm oil, which is used in a range of products such as cosmetics and chocolate spreads. A third of its output is consumed domestically.

Vegetable oils are among the staple food items that have seen prices hit record highs in recent weeks, according to the United Nations Food and Agriculture Organization.

Producers in Indonesia have been reluctant to sell at home recently because exporting is more profitable currently because of high international prices.

But authorities in the archipelago stepped in to try and control prices, fearing public anger as consumers in several cities were forced to queue for hours at distribution centres to buy cooking oil at subsidised rates.

The Indonesian export ban sent prices of palm, soybean, European rapeseed and canola oils to historic highs.

It plans to resume exports when the local bulk price of cooking oil falls to IDR14,000 (USD0.97), having soared in recent weeks to IDR26,000.

The price had dropped to IDR17,200 rupiah by Friday.

Officials inspect a container filled with cooking oil in Medan. PHOTO: AFP