Effective Monday, May 23rd, Indonesia will allow export of palm oil after a three-week ban that roiled vegetable-oil markets.  Indonesia produces 60 percent of the world’s palm oil. The restriction on export of designated palm oil products was taken to reduce domestic inflation and to ensure an adequate supply for consumers, considered a political necessity.

On Monday, May 23rd, Malaysian palm oil traded at 65 cents per pound at close compared to 88 cents per pound for soy oil.

The precipitous action by the Government of Indonesia resulted in disruption of the palm oil industry. Farmers experienced a 70 percent drop in the price of palm fruit since refiners shuttered refining plants as storage capacity was filled.