As the temporary ban on export of palm oil by Indonesia has created a crisis in Pakistan, the third largest importer of the edible oil, the foreign country has agreed to fast track supply of highly consumed kitchen item to Pakistan.
While meeting with the delegation of Pakistan headed by Federal Minister for Industries and Production Makhdoom Syed Murtaza Mahmud, the Indonesian government has promised to make sure that the delivery of Palm Oil to Pakistan is resumed at the earliest. According to the officials, the concerned authorities in Indonesia have been asked to ensure steady flow to the commodity in the future.
Prime Minister Shehbaz Sharif earlier had directed the ministry to take up the issue of disruption in oil imports from Indonesia immediately in order to meet the rising demand for the commodity.
According to a statement released by the Prime Ministers’ Office on Tuesday, the premier spoke to the Indonesian President Joko Widod in this regard. Meanwhile, under the direction of PM Shehbaz, a Pakistani delegation visited Jakarta to discuss matters of mutual interest with the government of the island nation.
The notification further mentioned that 10 ships loaded with edible oil will reach Pakistan within two weeks from Indonesia and Malaysia. Oil worth 250,000 metric tonnes is being imported from Indonesia after Minister for Industries and Production Murtaza Mehmood settled all matters related to the import of oil.
The first ship carrying 30 metric tonnes of edible oil will depart for Pakistan on Tuesday.
The shortage of edible oil was seen because of the global crisis due to tensions between Russia and Ukraine. In the next fiscal year, an impact worth $3-4 billion will be seen on the import bill.
It may be added here that on April 28, Indonesia halted shipments of crude palm oil and some derivative products to try to tame soaring prices of domestic cooking oil, surprising markets that were already rattled by earlier government intervention measures. President Widodo said that the supply of bulk cooking oil had reached a level greater than needed.
The export ban sent soybean oil prices soaring to a record high amid heightened concerns about already depleted global supplies of alternative vegetable oils. Indonesia’s export ban was designed to bring down prices in the country and limit shortages, according to authorities.
On May 19, Indonesia lifted its three-week-old palm oil export ban due to improvements in its domestic cooking oil supply, its president said, a move applauded by farmers amid mounting calls for its removal.
As per the officials at Ministry of Industries, Pakistan is the third-largest importer of Indonesian Palm Oil. In 2021, Pakistan had imported 2.78 million tonnes of Palm oil from Indonesia.
During the visit the of Pakistani delegation during June 12 to 14, 2022, Minister Syed Murtaza Mahmud met with the Indonesian Minister of Trade Muhammad Lutfi, Minister of Industry Agus Gumiwang Kartasasmita Coordinating Minister of Maritime and Investment Affairs, Luhut Binsar Panjaitan, and Minister of Industries, Agus Gumiwang Kartasasmita. Representatives of the largest Palm oil exporters to Pakistan and the Chairman of the Indonesian Palm Oil Association also called on the Minister.
In his interaction with the Indonesian Minister of Trade, while highlighting the strong historical and brotherly relations between Pakistan and Indonesia, Minister Mahmud underscored that Pakistan, being the third – largest market for Indonesian palm oil, was heavily dependent on Indonesian palm oil. He sensitized the Indonesian minister of the situation of edible oil in Pakistan and mentioned that Indonesia’s decision to ban palm oil export for a month had adversely affected the stocks of edible oil in Pakistan. Even after the ban was lifted on 23 May 2022, the exporters are still facing regulatory and logistical bottlenecks. He urged his Indonesian interlocutor to facilitate the earliest possible resumption of palm oil shipments to Pakistan by removing the bottlenecks.
 In response, the Indonesian Minister assured that Indonesia attached great importance to its relations with Pakistan and was ready to ensure an uninterrupted flow of Indonesian Palm Oil to Pakistan.
He further stated that after completing the necessary formalities, the first shipment of palm oil to Pakistan was expected to sail within 24 hours. The Minister further stated that he would ensure that the first shipment leaves the Indonesian port by the next day. The Minister also assured that Pakistan would be the first country to which the commodity will be exported, after the promulgation of new export regulations.
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