Main Markets Of Palm Oil In Asia Recover In 2021

JAKARTA – Three main markets of Indonesia’s palm oil products in Asia,  India, China, and Pakistan, are predicted to recover in 2021.

Indonesia’s palm oil products saw a rising trend of demand in the three main markets of Asia since the third quarter 2020, after seeing a decline during the first semester 2020.

“In India, the Covid-19 pandemic caused a decrease of palm oil consumption up to 30 percent. As of October 2020, India’s imports of palm oil products dropped from 9.4 million tons in 2019 to 7.2 million tons in 2020,” Solvent Extractors’ Association of India Executive Director BV Mehta said during the Indonesian Palm Oil Conference (IPOC) 2020 New Normal, which was organized virtually in December 2020.

Mehta pointed out that the decrease of consumption in India was not only caused by the pandemic, but also because the Indian government imposed import tariff and its decision to include RBD palm olein into the list of restricted commodities.

He said, however, that India will at least need between 8.4 and 9.0 million tons of palm oil in 2021. Until now, India’s import of palm oil is higher from Indonesia than from Malaysia.

“India’s imports of vegetable oils are still dominated by palm oil as compared to other vegetable oils. The palm oil imports are expected to increase along with the increase of consumption and population growth,” he said.

Meanwhile, president of Chamber of Commerce for Import and Export of Foodstuffs Native Produce and Animal By-Product of China, Cao Derong said that until the first quarter 2020 China’s imports of palm oil products dropped significantly to 320,000 tons.

“But in June 2020, China’s import volume of palm oil rose by 25.5% year on year basis following China’s reopening policy after Covid-19 lockdown,” said Cao Derong.

Cao Derong said that China’s imports of vegetable oils are dominated by palm oil. China’s palm oil consumption accounts for 40 percent of total consumption of the local chemical industries.

In 2019, China imported 8.48 million tons of palm oil or 66 percent of the country’s total imports of vegetable oils. Of the total palm oil import, 6.02 million tons were imported from Indonesia.

Cao Derong said that China’s high demand has made the country very dependent on imports of vegetable oils, especially palm oil.

“As China will see its economy recovering in 2021, the demand for palm oil is expected to be rising,” Cao said.

But Cao reminded the possible impact of Malaysia’s incentive policy for Chinese market. “The Malaysian government has a big incentive policy to export palm oil to China. As a result, there will be a price gap between the palm oil from Malaysia and Indonesia, which could affect import volume of palm oil from Indonesia,” added Cao. (*)

Source: | Featured image via