Palm Oil Price Surged as Indonesia Bans Exports
Indonesia will ban palm oil exports from April 28, until further notice. President Joko Widodo on Friday, April 22, has announced a halt of shipment of cooking oil and its raw material to control soaring domestic prices. The country has been running low on palm-based cooking oil since November, 2021, as producers turn to exports in order to take advantage of the increase in prices around the world. The country reported a more than 40% increase in the price of domestic oil since the year started.
Okomu and Presco, being one of the largest producers of oil palm in Nigeria, stand the chance of benefiting from the Indonesia ban. You will recall that Okomu and Presco reported huge increases in their revenue in the completed financial year, where Okomu revenue jumped by 60% from the previous year, while recording 292% in its PAT. Presco also reported a 97% jump in revenue from the previous year, with a 258% increase in PAT. This increase was traceable largely to increase in sales of palm oil.
With the Indonesia ban, these two companies could be on their way to recording enormous profit in the months to come, as the ban could lead to higher production and higher commodity prices, resulting in higher revenue for the two companies.
Are you a shareholder in any of these two companies? What are your expectations?
Or do you intend to become a shareholder? Let’s hear from you in the comments section.