CPO Production Predicted To Rise By 3.5% Next Year

Jakarta – The Indonesian Palm Oil Association (GAPKI) predicted that the production of crude palm oil (CPO) in 2021 will reach 49 million tons, an increase of 3.5 percent from the expected 47.4 million tons this year.

GAPKI Vice Chairman III in charge of trade and sustainability, Togar Sitanggang said that the projection of CPO production increase is based on the realized production in 2020, especially during the second semester 2020 which is very good. “During the second semester this year production has been rising. The rising trend is expected to continue next year,” Togar said during the Indonesian Palm Oil Conference (IPOC) 2020 that was organized virtually last week.

Togar noted that the projection was made prudently by considering the factor of economy that is expected to start growing, the possible second and third wave of Covid-19 pandemic, and the availability of Covid-19 vaccines in Indonesia.

Regarding local consumption, Togar projected there will be an increase for food at around 2.0 percent to 8.4 million tons. “The consumption for food will stay more or less at the same level with that of last year, as the first semester 2021 will be more or less the same with that during 2020. The demand for oleochemical will increase by around 14 percent to 1.8 million tons from 1.57 million tons in 2020,” said Togar.

He said that the consumption for biodiesel will be based on 2 scenarios. If the government continues the mandatory program of biodiesel 30 percent (B30), then there will be an increase of CPO demand for biodiesel at around 12 percent to around 8.0 million tons. But if the government decided to return to B20 then the demand for biodiesel will decrease by around 25 percent to 5.4 million tons.

According to him, the exports of palm oil products are projected to increase. If the B30 program continues, the exports in 2021 are expected to reach around 36 million tons, or an increase of 11.5 percent from the exports in 2020 at 32.26 million tons.

“But this will depend on the global economic condition in 2021, whether the Covid-19 vaccines are available for all so that condition will return to normal,” said Togar.

He further said that if the B30 program continues, then the CPO stock by the end of 2021 will reach around 7.0 million tons. But if the government decides to return to B20 program, there will be an addition of final stock at around 2.0 million tons to 9.0 million tons in 2021. (*)

Source: KONTAN.CO.ID | Featured image via palmoilmagazine.com