Indonesia bans palm oil exports

STORY: Indonesia announced plans to ban palm oil exports on Friday, a shock move by the world's largest palm oil producer that could further inflame global food inflation.

In a video broadcast, Indonesia's President Joko Widodo said he wanted to ensure the availability of food products at home, after global food inflation soared to a record high following Russia's invasion of major crop producer Ukraine.

The halting of shipments of cooking oil and its raw material, widely used in products ranging from cakes to cosmetics, could raise costs for packaged food producers globally.

It could force governments to choose between using vegetable oils in food or for biofuel.

Indonesia counts for more than half of global palm oil supply.

Since 2018, the country has stopped issuing new permits for palm oil plantations, often blamed for deforestation and destroying habitats of endangered animals such as orangutangs.

Global prices of crude palm oil, which Indonesia uses for cooking oil, have surged to historic highs this year amid rising demand and weak output from top producers.

Malaysia - the world's number 2 palm oil exporter is also unlikely to plug the gap as it faces a production shortfall due to a pandemic-induced labor shortage.