Gapki: High Palm Oil Price Due To Low Production And Biodiesel

JAKARTA – The Indonesian Palm Oil Association (Gapki) said that the average price of palm oil during February 2021 stayed at the highest level due to a combination of low production of palm oil and the steady production of biodiesel.

Gapki Executive Director Mukti Sardjono said that the average price of palm oil in February 2021 reached US$1,085/ton CIF Rotterdam, which was higher by US$60 from that in January and the highest level during the last six years.

“The high price was caused by the low production of vegetable oils and the biodiesel production, which increased as a result of the commitment of several governments—including Indonesia, the USA, Brazil and Germany, to keep implementing the program of using biodiesel,” Mukti said in a press release issued on Saturday, 17 April 2021.

He said that the Oil World estimated the global production of biodiesel in 2021 will reach 47.5 million tons or 2.2 million tons higher than that in 2020 and  1.5 million tons higher than that in 2019.

According to him, due to the high price many importing countries of palm oil decided to hold their purchases that had resulted in the drop of exports. Indonesia’s exports of palm oil in February 2021 were estimated at around 1,994,000 tons, which were 867,000 tons (-30 percent) lower than that in the previous month. The palm oil export value was estimated at around US$2 million, which was US$600 million (-23 percent) lower than that in the previous month.

Palm oil production in February 2021 also saw a decrease at around 10 percent from that in January due to seasonal factor, while compared to that in 2020, the production in February 2021 was  lower by 6.0 percent from that of February 2020.

Unlike export, the domestic consumption in February 2021 reached 1,600,000 tons or an increase of 5.5 percent if compared to that in January. The consumption for foods increased by 4.2 percent to 795,000 tons, for biodiesel rose by 9.6 percent to 631,000 tons, while for oleo-chemical dropped by 2.2 percent to 174,000 tons. The increase of domestic consumption was resulted from the easing of the large scale social restriction (PSBB) implementation. (*)

Source: | Featured image via,sg