REGI - Indonesia halts palm oil exports complicating supply chains and lifting food prices

Indonesia's President Joko Widodo announced a palm oil export embargo Friday; the ban is set to beginning April 28th. Edible oils have rallied ~40% year to date, with the UN edible oils index hitting all-time highs in March; soybean oil in Chicago bounced ~3% on the back of Friday's announcement. Indonesia accounts for over half of global palm oil production, though palm oil is widely used in food processing and cooking, it's also a major ingredient in personal care products, including everything from soap and shampoo, to lotion and makeup. For energy investors, its noteworthy that palm oil has long been a feedstock in the production of bio-diesel; in Europe,  palm oil feedstocks accounted for ~18% of bio-diesel production in 2020 (TTE) (E). A palm-oil embargo could complicate sourcing for consumer goods producers like Procter (PG) and Colgate (CL), while also posing challenges for processed food producers like General Mills

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Indonesia halts palm oil exports, complicating supply chains and lifting food prices