Palm oil prices reverse as world cooking-oil leader Indonesia reportedly will still allow some exports after surprise ban

• Palm oil prices dropped as much as 4.1% as fears over Indonesia's export ban eased.
• Indonesia will only halt exports of bulk and packaged RBD palm olein, sources told Bloomberg.

Palm oil prices turned lower as a surprise export ban by Indonesia, the world's top cooking-oil exporter, isn't expected to be as stringent as many feared.

Prices jumped as much as 7% early Monday after the Southeast Asia country announced that it would ban exports of the commodity starting on Thursday. But palm oil prices for July delivery later dropped as much as 4.1% to $1,399 a ton in Kuala Lumpur, before closing down 2.1%, Bloomberg data shows.

The export ban will only apply to bulk and packaged RBD palm olein — which accounts for 30%-40% of Indonesia's total palm oil exports — while exports of crude palm oil and RBD palm oil won't be halted, sources told Bloomberg. Reuters also reported that crude palm oil shipments would be excluded from the export ban.

RBD palm olein is a more processed form of the commodity that is used in industrial frying of food.

About a third of global edible oil exports comes from Indonesia, and the country is responsible for about half of the world's supply of palm oil, the most widely used vegetable oil. It's used for cooking, as well as thousands of consumer products like detergents and makeup.

Indonesian President Joko Widodo stunned markets Friday, when he announced the ban, saying it is intended to bring down domestic palm-oil prices and boost domestic food availability in light of global food inflation.

But a full ban would exacerbate global food inflation and hurt other countries. The war in Ukraine has already sent prices of edible oils rising, as the warring nation is a top sunflower-oil exporter.