Indonesia's palm oil DMO rule changes will not affect export ratio, official says
01/08/2024 (The Edge Malaysia), Jakarta - Indonesia's plan to revise domestic market obligation (DMO) rules for palm oil will not affect the DMO export ratio, a senior trade ministry official said on Thursday.
Indonesia, the world's biggest palm oil exporter, obliges producers to sell a portion of their output to the local market at a capped price in order to gain export permits.
Asked whether this DMO export ratio will change, Budi Santoso, director general of international trade, said there was "no plan yet" on such a change.
Export quotas are currently set at four times the volume of palm oil that companies supply locally under the DMO scheme. Extra allotments are given to companies that sell in smaller, household-friendly sizes.
As of the end of July, the outstanding palm oil export quota stood at 3.95 million metric tonnes, Budi said.
Under the revision, the government plans to raise the cooking oil price cap for the domestic market said Isy Karim, director general of domestic trade, as the current retail price has surpassed the cap that was set in 2022.
The new rule will no longer recognise bulk cooking oil as DMO portion, he added.
Indonesia in setting up the DMO scheme aimed to ensure 300,000 tonnes of cheap cooking oil was sold each month. However, the scheme in recent months has achieved only around half of that target due in part to a weak export market.