PRESS RELEASE
Indonesian Palm Oil Association (IPOA)
AMID COVID-19, PALM OIL INDUSTRY READY FOR SEASONAL FASTING AND EID
Amid the Coronavirus Disease 2019 (Covid-19) pandemic, the palm oil industries have been continually in operation in normal condition, so that they can fulfill the local need and the export market. The local supply is mainly aimed to fulfill the need of cooking oil as one of the staple foods, surfactant as raw material for making soaps, and glycerin as raw material to produce hand sanitizers which are currently needed to fight the Covid-19.
Under the weak condition of global economy, the palm oil industries as of February 2020 contributed a total foreign exchange of US$3.5 billion, causing a surplus of US$1.9 billion in Indonesia’s trade balance. During the period, Indonesia managed to get export income from the non-oil-gas sector at USD4.0 billion, while its foreign exchange spending for oil-gas imports amounted to USD2.1 billion.
In accordance with the standard operation procedures (SOP), the operations of oil palm plantations, especially the main activities in the production system, have been implemented by keeping a safe physical distancing. Besides, the activities in plantations, palm oil mills, and in the workers’ housing complexes, have been conducted based on the Covid-19 preventive protocol.
Compared to January 2020, the production of CPO and PKO in February dropped by 5.4 percent. During the same period, the palm oil export increased by around 140,000 tons, and local consumption rose by around 30,000 tons. The export increase was due to the increase of CPO derivatives, while the exports of PKO and oleo-chemical dropped. The palm oil exports during the period of January – February 2020 dropped by 20 percent, a significant drop year on year (YoY) if compared to that of January-February 2019.
Export to China during the period of January-February 2020 decreased by 500,000 tons, to Africa decreased by 250,000 tons, to India by 188,000 tons if compared to exports during January – February 2019.
The export drop to China was very likely caused by the outbreak of Covid-19. The drop to Africa was probably caused by high prices, while the drop to India was suspected to have caused by the doubt of importers to make purchase contracts for February shipping due to the Indian government’s plan to apply a quota of processed palm oil.
The price of CPO KPB FOB in February 2020 reached USD600 per ton, as compared to US$700 in January 2020 with latest stock by end of February at 4,000,000 tons, a decrease of around 500,000 tons from the stock by end of January.
Local consumption in February 2020 rose by around 50,000 tons from the local consumption in January. The big increase was seen in biodiesel at 70,000 tons (12%), while for foods dropped by 15,000 tons. Usually, 2 – 3 months ahead of eid (Idul Fitri celebration) local consumption increased as producers of cooking oil, margarine, biscuits and others, start producing extra stocks to meet the rising need during the fasting month and eid celebration. Based on the available stocks by end of February 2020, the palm oil stock for the need of fasting and eid will be sufficient.
Jakarta, April 17 2020
Indonesian Palm Oil Association (IPOA)
More informations, contact:
Ir. Mukti Sardjono, M.Sc
Executive Director of IPOA
Phone. 021-57943871
Fax. 021-57943872
