[Special Stock] Sempio Deploys Warships to Enforce Palm Oil Export Ban on All Products... Chain Reaction Shock to Daily Necessities like Ramen and Detergents

[Asia Economy Reporter Hyungsoo Park] JC Chemical and Sempio are rebounding within a day. The Indonesian government, which had initially announced it would only suspend exports of cooking oil and RBD palm olein, reversed its policy and suspended exports of crude palm oil (CPO) and RBD palm oil from 0:00 on the 28th, which appears to have affected stock prices.

At 10:46 a.m. on the 28th, JC Chemical was trading at 16,400 won, up 27.13% from the previous day. Sempio is also up more than 24%. They are rebounding after a sharp drop the previous day.

The Indonesian Ministry of Trade announced an official regulation order on the night before, banning the indefinite export of crude palm oil, RBD palm oil, RBD palm olein, and used cooking oil (UCO), including cooking oil.

When palm fruit is pressed to extract crude palm oil and then refined, bleached, and deodorized (RBD), it becomes RBD palm oil. Through fractionation, it is separated into the solid part called palm stearin and the liquid part called palm olein.

Economic Coordinating Minister Airlangga Hartarto announced on the 26th that exports would be banned only for cooking oil and the raw material RBD palm olein until the price of cooking oil in all regions of Indonesia reached 14,000 rupiah (1,230 won) per liter, but reversed this decision within a day.

After the Ministry of Trade announced the export ban on most palm oil products including crude palm oil, Minister Airlangga sent a brief message saying, "This is the president's decision reflecting the citizens' response."

If Indonesia had only banned exports of RBD palm olein as initially announced, the impact would have been significant only on food companies such as ramen, snacks, and chocolate manufacturers. However, by suspending exports of crude palm oil and RBD palm oil as well, companies in cosmetics, detergents, and biodiesel sectors are also affected.

As the world's largest palm oil exporter, Indonesia's suspension of most palm oil product exports has left palm oil and cooking oil distributors bewildered. An industry insider said, "There is no 'Plan B' to replace Indonesian supplies."

On the previous day at the Kuala Lumpur exchange in Malaysia, the July delivery price of palm oil surged up to 10% intraday compared to the previous trading day, and soybean oil prices on the Chicago exchange also rose by 4%.