Press Release
Indonesian Palm Oil Association (IPOA)
PALM OIL INDUSTRY PERFORMANCE IN OCTOBER 2021 AND 2021 ESTIMATION:
PRICE STAYS HIGH, EXPORT VALUE 2021 POTENTIAL TO EXCEED US$35 BILLION
The palm oil production in October reached 4,040 thousand tons, which was lower than that in September 2021 at 4,176 thousand tons. The monthly production trend during the second semester 2021 is slightly unusual, as there was no increase seen until October. As of October 2021, the crude palm oil (CPO) production reached 39 million tons and palm kernel oil (PKO) reached 3.7 million tons. Based on field monitoring, the production in November and December is predicted to increase by around 8,580 thousand tons and PKO around 815 thousand tons, so that CPO production in 2021 is predicted to reach 47.472 million tons and PKO at 4.482 million tons or a total of 51.954 million tons. Compared to the CPO production in 2020 at 47 million tons, it was a slight increase of 0.93%.
Local consumption in October reached 1,499 thousand tons, or lower by 24 thousand tons than that of September at 1,475 thousand tons, while local consumption as of October 2021 reached 15,178 thousand tons. Total local consumption of palm oil during the last four months fluctuated slightly at the level of 1,460 thousand tons per month. With the assumption of total consumption in November and December reaching 3.0 million tons, the total consumption in 2021 is estimated to reach 18,178 thousand tons, which is higher (+4,8%) than the total consumption in 2020 at 17,349 thousand tons.
The rising trend of palm oil price is still continuing. The price in October reached US$1,368/ton CIF Rotterdam, which was higher than the price in September at US$1,235 and August at US$1,236. The export value of palm oil in October reached US$3.673 billion, with the export volume reaching 3,213 thousand tons or an increase of 230 thousand tons (+11.3%) from that in September. The biggest increase was seen in the processed palm oil at 298 thousand tons or 13.5% higher than that of the previous month, while the CPO export tumbled to 147 thousand tons or a decrease of 7.0% from that of September.
The biggest export was seen to Egypt at 165.1 thousand tons, an increase of 110.7 thousand tons or 203.3%. The export to China in October still rose by 73.7 thousand tons (11.79%) to 698.8 thousand tons, which was 26.6% higher year on year (YoY) than that of the same period in 2020. The export to India dropped by 86.2 thousand tons (-25,97%) to 245.6 thousand tons, which was 1,144 thousand tons or 25.8% lower (YoY) than that of 2020. Export to European Union (EU) increased by 91.6 thousand tons (+26,79%) as compared to that of September, but YoY it was 3.1% lower than that of 2020. As of October 2021, the export value of palm oil reached US$ 29.528 billion, which was the highest so far.
With an estimation of CPO and PKO production in November-December 2021 at 9.395 million tons and consumption at 3.0 million tons, then there is an availability of 6.4 million tons for exports. Based on the YoY achievement, the export to China has been higher by 26%, to India lower by 25.8%, the export of processed palm oil in November and December is assumed at 2,200 thousand tons, the export of CPO 300 thousand tons per month, the export of processed PKO at 150 thousand tons and oleochemical at 350 thousand tons per month. Then exports in November-December are estimated to reach 6.0 million tons, so that total exports in 2021 are projected to reach around 34.9 million tons or around 0.9 million tons higher than the exports in 2020 at 34 million tons.
The price of palm oil in November and December 2021 is estimated to plateau, but still very possible to reach more than US$1,300/ton CPO Cif Rotterdam. The price decrease was caused by the relatively good harvest of oilseed, but its crushing industry was still hindered by various factors in the oilseed producing countries, such as Argentine, Brazil and Russia, so that generally the prices of vegetable oils were suppressed.
With the estimation of price and export volume explained above, the export value of palm oil in 2021 is highly possible to reach more than US$35 billion.
Jakarta, 15 December 2021
Indonesian Palm Oil Association (IPOA)
For further information, please contact:
Mukti Sardjono
Executive Director GAPKI
