However, Jakarta will widen the ban "if there is a shortage of refined palm oil," according to a presentation the government gave to companies on Monday.
RBD palm olein accounts for around 40 per cent of Indonesia's total exports of palm oil products, according to analysts' estimates.
The prospect of further tweaks to export restrictions has caused jitters among Indonesian palm oil producers and processors who typically export over twice as much palm oil as is consumed domestically.
"Based on simple calculation, even before one month, all the tanks would be full if it's a total ban," said Eddy Martono, secretary general of GAPKI, Indonesia's biggest palm oil association.
Once tanks run out of space, mills can't process the fresh fruit bunches, which would rot and force production to drop, Martono told Reuters.
Indonesia is now holding around 5 million tonnes of palm oil stocks, and the country's storage capacity of around 6-7 million tonnes would be full by the end of next month, said a Singapore-based dealer with a global trading firm.
Indonesia produces around 4 million tonnes of palm oil every month and consumes around 1.5 million tonnes.
In 2021, Indonesia consumed 18.4 million tonnes of palm oil out of total production of 51.3 million tonnes, GAPKI estimates.
"As the domestic cooking oil market is not enough to absorb all the production, a more extended ban may hurt the industry, particularly the smallholders," said Carolyn Lim, senior manager, corporate communications at Musim Mas, a palm oil producer with plantations in North Sumatra.
Musim Mas estimated the ban could last a few months, instead of a few weeks, if it had covered a wider range of palm oil products.
Fresh fruit bunch prices have already dropped by between 400 rupiah and 1,000 rupiah per kilogram since the announcement, from 3,700-3,900 per kilogram, Mansuetus Darto, secretary general of Indonesia's Oil Palm Farmers Union, said in a statement.
"The ban is a political decision to support consumers. But if the government keeps it for a longer period, then farmers will suffer," said a Mumbai-based vegetable oil dealer with a global trading firm.
Buyers of Indonesian palm oil have already voiced complaints about its export policies and will ask Jakarta to review the policy, said Rasheed JanMohd, chairman of Pakistan Edible oil Refiners Association (PEORA).
"It's time for Indonesia to cut down use of palm oil for biodiesel and remove the ban. If Indonesia continues the ban, then we would ask the Pakistan government to speak to the Indonesian government to restore supplies," JanMohd said.
India, the world's biggest palm oil importer, has requested Indonesia to increase supplies.