When Tourism Sick, Palm Oil Stays Big Earner Of Foreign Exchange

JAKARTA – The palm oil industry is expected to stay the big contributor of foreign exchange during 2020. Despite of the outbreak of Covid-19 pandemic that had negatively affected most of economic sectors, the palm oil industry can still perform positively.

During the first semester 2020, the total value of palm oil exports had reached USD10.06 billion. It is predicted that until the end of 2020, the total exports of palm oil will be more or less at the same level with the total value of palm oil exports last year at USD20.2 billion.

The Indonesian Palm Oil Association (Gapki) Chairman Joko Supriyono said that he could not yet predict the total value of exports until the end of this year. “But the palm oil industry is still operating well despite of the Covid-19 pandemic. We hope there will be an increase, or at least at the same amount with that of last year,” Joko Supriyono said during a virtual press conference in Jakarta on Tuesday.

Joko said that the production of crude palm oil (CPO) in June 2020 increased 4.096 million tons, or an increase of 13.5% compared to production in May 2020. Local consumption in June 2020 dropped by 3.5% to 1,331 million tons as compared to consumption during the previous month. Meanwhile, the palm oil exports increased significantly by 13.9% to 2.767 million tons.

The largest increase of exports was seen for destination of India at 52% to 583,000 tons, followed by Africa at 43.3% to 271,000 tons, China at 33% to 440,000 tons, and Pakistan at 32% to 203,000 tons.

“The increase of palm oil exports was driven by, among others, the increase of CPO price from the average USD526 per ton during May to USD602 per ton-Cif Rotterdam during June 2020. The export value had also increased from USD1.474 billion to USD1.624 billion,” said Joko.

Joko noted that a number of export destination countries have imposed lockdown since February 2020. As a result, the exports to major export destinations, such as Europe, China and several other countries, had weakened. Only several countries saw an increase, such as India at an increase of 23%, the USA at 7% and Pakistan at 1%.

“Due to lockdown by several export destination countries, the volume of exports during the first semester 2020 decreased by 15.5 million tons as compared to the same period last year,” he said. (*)

Source: sindonews.com | Featured image via investor.com