Vegetable oil traders were preparing to leave their offices last Friday when Indonesian President Joko Widodo appeared at a briefing with stunning news: In just a few days, the nation would ban exports of cooking oil and its raw materials to ease prices and shortages.

The bold move by Indonesia, the world’s top palm oil producer, immediately sent the industry into a tailspin. Analysts threw around words like “mayhem” and “big blow.” Frustrated traders braced for chaos in the $50 billion market that was already squeezed from Russia’s war in Ukraine. The futures market in Malaysia had closed for the day but rival soybean oil jumped to a fresh record.

Anilkumar Bagani, head of research at Mumbai-based Sunvin Group, said the new policy could impact markets across Asia and Europe, pushing traders to reroute palm oil shipments and source from countries like Malaysia and Thailand. Indonesia, he said, “hurled a bomb at the palm oil market.”

In the first hour of trading on Monday, benchmark palm oil futures in Kuala Lumpur soared as much as 7%. But prices started slumping as details emerged that Indonesia’s plan will exclude products such as crude palm oil shipments. The tropical oil fell more than 4% before closing 2% lower. Trading volume in the July contract was a few times higher than the three-month daily average.

“Traders were caught off guard with Indonesia’s policy uncertainty and could not unwind their profitable positions in time as prices became very volatile,” said David Ng, senior trader at IcebergX Sdn. in Kuala Lumpur.

The lack of details about the longevity of the ban, which comes into effect April 28, kept traders on their toes while also raising concerns about Indonesia’s business image. The country is a major commodities supplier and had imposed restrictions on nickel and coal exports in the past, roiling global markets.

Over the last few days, palm oil traders made frantic calls to policy makers, industry associations and friends in the hopes of learning more about the ban’s scope and timeline. Some brokers were worried that vessels scheduled to load might get stuck or canceled as the notice period is too short.

“Indonesia need to get their governance right,” said Sathia Varqa, the owner of Palm Oil Analytics in Singapore. “Buyers will be very, very wary of sourcing from Indonesia.”

That’s a sentiment echoed by buyers in India, the world’s top importer of vegetable oils. Some said the policy decision has huge implications for the global supply chain and should have been handled with more care. Meanwhile, the volatility is enough to turn them off from making large purchases.

“Traders are in a wait and watch mode,” said G.G. Patel, managing partner of GGN Research and a longtime vegetable oils trader. “Deals are not happening now.”

Indonesia’s export ban, though still scant on details, comes at a time when the Southeast Asian nation is struggling to quell street protests over high prices. The turbulence has become a key political issue for President Jokowi as cooking oil costs could push other food prices higher ahead of the Eid al-Fitr holiday, which is usually marked with feasts and celebration.

The government has rolled out cash subsidies and deployed police to ensure that Indonesia, home to the world’s largest Muslim population, has an ample supply of edible oils for the festival. Efforts to cool the rally also led to the detention of a trade official in a corruption case.

The ban may impact already tight supplies and amplify fallout from the Russia-Ukraine war, which has hit the sunflower oil trade especially hard. The ubiquity of vegetable oils in everything from candy to fuel means that Indonesia’s actions could influence global food inflation for a long time to come.

“It’s tough to do business in this environment, with policy flip-flops resulting in huge price volatility,” said Gnanasekar Thiagarajan, head of trading and hedging strategies at Kaleesuwari Intercontinental. “The largest producer’s move to take such a decision in haste and then immediately making amendments has not gone well with the market.”