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Chaos Engulfs $50 Billion Palm Market as Flip-Flops Vex Traders

  • Palm oil export ban by top grower Indonesia stuns traders
  • ‘Buyers will be very, very wary of sourcing from Indonesia’

Vegetable oil traders were preparing to leave their offices last Friday when Indonesian President Joko Widodo appeared at a briefing with stunning news: In just a few days, the nation would ban exports of cooking oil and its raw materials to ease prices and shortages.

The bold move by Indonesia, the world’s top palm oil producer, immediately sent the industry into a tailspin. Analysts threw around words like “mayhem” and “big blow.” Frustrated traders braced for chaos in the $50 billion market that was already squeezed from Russia’s war in Ukraine. The futures market in Malaysia had closed for the day but rival soybean oil jumped to a fresh record.