Indonesia-Malaysia competition over food exports grows

Significance

Malaysia, long a major supplier of poultry to the city-state, banned chicken exports last month. Indonesia and Malaysia are the top two exporters of palm oil. Jakarta lifted a ban on exports of crude palm oil and some of its derivatives in May, and more recently decided to scrap its palm oil export levy until end-August.

Impacts

• High prices for cooking oil and chicken will remain a concern in the region in the weeks ahead.
• Malaysia will likely lift all restrictions on poultry exports once domestic prices for the commodity stabilise.
• Both Malaysia and Indonesia will be under pressure to ensure sustainable palm oil production.