Palm Oil Production Not Improving, Price Retains

Press Release
Indonesian Palm Oil Association (IPOA)

Palm Oil Production Not Improving, Price Retains

Palm oil production in January 2021 dropped by 3.421 million tons in crude palm oil (CPO) and 334,000 tons in palm kernel oil (PKO) or around 7.1% lower than production in December 2020. The big drop was due to  seasonal factor and floods in a number of palm oil producing regions that affected harvesting process.

Palm oil consumption for domestic food products rose to 763,000 tons or 5.5% higher than that in December 2020. During the outbreak of Covid-19 pandemic, the  palm oil consumption for food products has consistently shown a rising trend since June 2020. Conversely, the consumption for oleochemical in January 2021 was lower (- 9,6%) than such consumption in December 2020 and it was the first drop since January 2020. Its consumption for biodiesel was slightly lower (-0,7%) than that in December 2020. Overall, total domestic consumption rose by 1.1% from that of December 2020 and +1,5% from that of January 2020.

Compared to December 2020, palm oil export in January 2021 was lower by 18.5%, and so was the processed products (-7,7%). It was possibly because export in December 2020 was very high at 3.5 million tons (the highest during whole year of 2020), causing the importing countries to have high  availability of stocks. The highest drop of export was seen by CPO at 54.6% lower than the export in December 2020. The export of oleochemical decreased (-8,7%) and it was the first drop since January 2020. The export value in January 2021 reached US$ 2.596 billion which was lower by 8% from that of December 2020 at US$ 2.825 billion.

Based on country of destination, the export in January 2021 to China dropped the most (- 166,400 tons/-28%) compared to that in December 2020, to Malaysia dropped 166,200  tons (-77%), to India dropped 136,200 tons (-41%) and to Netherlands dropped 80,000 tons (- 81%). Export to Myanmar has shown a rising trend every year, and in 2020 reached 852,000 tons and in January 2021 saw an increase of 47,000 tons (+51%) from that of December 2020.

Since 2017, Indonesian palm oil has been exported to around 160 countries. China, India and Pakistan have been the top three destinations, while the Netherlands, Malaysia, Spain and USA were ranked at 4 to 7. Bangladesh, Italy and Egypt were consistent at the ranks of 8-10, Myanmar has been always at the ranks of 11-12, Russia at 12-13, Philippines and Korea always at 14-15, Japan at 16-17 and other countries such as Singapore, Vietnam, UEA, Ukraine, South Afrika and Tanzania were consistent as the top 20 destinations. Exports to those countries account for 87-90% of total exports of Indonesia. Bilateral relations with the traditional and prospective importing countries should be continually improved to maintain and increase the palm oil exports of Indonesia.

Indonesia’s palm oil export to Switzerland is very small and generally consists of oleochemical.

In 2020, the export to Switzerland only amounted to 15.9 tons, which are all in oleochemical at the value of US$ 20,700 as compared to the total export value of palm oil at US$ 22.97 billion. But despite the fact, the result of referendum on palm oil showed that Swiss people trust the palm oil products of Indonesia. We hope that the referendum result will also increase the trust of other countries, including those of the European Union, on the sustainable production of Indonesian palm oil.

Jakarta, 17 March 2021
Indonesian Palm Oil Association (IPOA)

For further information, please contact:

Mukti Sardjono
Executive Director GAPKI
Fax. 021-57943872