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domestic market obligation (DMO)

domestic market obligation (DMO)
Aerial view of a palm oil plantation in Ogan Komering Ilir, Sumatera Selatan, 9/5/2022. ANTARA FOTO/Budi Candra Setya/pras.

KONTAN.CO.ID - JAKARTA, July 2 (Reuters) - Indonesia proposed raising palm oil export quotas on Friday and is considering increasing mandatory levels of biodiesel in fuel mixes to prop prices for farmers at a time when domestic palm oil inventories are high, a senior minister said on Saturday.

Palm oil inventories ballooned and mills limited purchases of fresh fruit bunches (FFB) from farmers after Jakarta stopped exports of crude palm oil and some other derivatives for three weeks to May 23 in a bid to contain soaring domestic cooking oil prices.

Indonesia replaced the ban with a domestic market obligation (DMO), requiring companies to supply a portion of their products to the domestic market through the government's bulk cooking oil programme, and linked DMO volumes to companies' export permits and quotas. DMO volumes as of the end of June were around 270,000 tonnes, the government said.

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