JAKARTA (CNA) – Nine Indonesian companies on Friday signed contracts to sell 2.5 million tonnes of palm oil products valued at USD2.6 billion to 13 Chinese buyers, the Indonesian Trade Ministry said in a statement.
The deal was a follow-up from President Joko Widodo’s state visit to China in July.
The Indonesian government initially said China had committed to importing an additional one million tonnes of Indonesian crude palm oil.
It was unclear over what period the deal would be executed.
Indonesia exported 6.6 million tonnes of palm oil products to China in 2021, the trade ministry said.
Indonesian Trade Minister Zulkifli Hasan said exports to China would not disrupt domestic cooking oil supply as the government has mandated exporters to supply the domestic market to obtain export permits.
“Domestic market obligations and domestic price obligations for cooking oil producers and the crude palm oil industry are still in place to ensure a stable supply of cooking oil raw materials,” Zulkifli said in the statement.
The world’s top palm oil exporter Indonesia banned the export of palm oil for three weeks starting in late April to rein in rising cooking oil prices which led to a problematic inventory glut.
Jakarta has waived the levy since mid-July to encourage exports but may introduce back the levy in the second half of November.