Palm Oil Contributes 15% Of Indonesian Exports

JAKARTA – The Indonesian Palm Oil Association (GAPKI) reported that despite of the Covid-19 pandemic that has affected almost all economic sectors during 2020, palm oil industry can still achieve a positive growth.

During the third quarter of 2020, the price of crude palm oil (CPO) reached US$666 per ton. “Today the price of CPO reached US$855 per ton. It means that despite of many sectors in Indonesia seeing slowdown, the palm oil sector can still contribute positively to the national economy of Indonesia,” GAPKI’s Communication Division Head Tofan Mahdi said during a webinar in Jakarta on Tuesday.

He said that the performance of Indonesia’s trade balance was not so bad during the Covid-19 pandemic as in September 2020 it saw a surplus of US$13.82 billion, as compared to a deficit of US$2.24 billion during September 2019.

“Why deficit last year? It’s because the CPO price at that time still low and how the palm oil companies could survive at that time. And this year condition is better than last year, as the CPO price is very good and has contributed a surplus of US$13.82 billion for Indonesia,” he said.

According to Tofan, until September 2020 the contribution of palm oil exports to Indonesia’s foreign exchange reached US$15 billion. “With the total export value of Indonesia at US$117 billion, of which US$15 billion derived from exports of palm oil, then the palm oil industry contributes between 10-15 percent to the total of Indonesian exports,” he asserted.

He noted that most of Indonesia’s palm oil exports or around 75% were absorbed by China, India, European Union, and Pakistan.

He added that despite of global weakening demand due to the outbreak of Covid-19 pandemic, the global demand for palm oil is still relatively high. “I think the positive performance of palm oil industry has prevented Indonesia from seeing a very sharp drop of economic contraction like the ones seen by Singapore and the USA due to the Covid-19 pandemic,” Tofan concluded. (*)

Source: |  Image via