JAKARTA – Indonesia’s stagnant production of its top commodity palm oil amid rising domestic demand is projected to reduce its palm oil exports during this year (2024) by more than 4%.
The Indonesian Palm Oil Association (GAPKI) Chairman Eddy Martono said that the highest increase of palm oil production expected this year is no more than just 5%. If the mandatory production of Biodiesel 35% (B35) is continued, then Indonesia’s domestic need of palm oil will reach 25 million tons this year.
“Considering the stagnant production, our palm oil exports this year (2024) will decrease by 4.13% to only around 29 million tons,” Eddy was quoted in a press release on Monday (15/1) as saying during the Pakistan Edible Oil Conference in Karachi, Pakistan, over the weekend.
Meanwhile, GAPKI Foreign Division Head Fadhil Hasan said that besides the mandatory biodiesel program, Indonesia’s local consumption is also driven up by oleochemichal products.
Actually, the declining trend of Indonesia’s palm oil exports has been seen since 2020 as indicated by its major export destinations, namely China, India, European Union, Pakistan and the USA.
Fadhil noted that Indonesia’s palm oil production has been continually declining since 2005. “During 2005-2010 it saw a decrease of 10%, during 2010-2015 it decreased by 7.4%, then during 2015-2020 it decreased by 3.2%, and since then it’s been stagnant.” said Fadhil.
The Global Research Analyst Thomas Mielke said that the decrease of palm oil production will cause a significant impact at the global market of vegetable oils amid the rising global consumption of vegetable oils.
But according to Mielke, Indonesian palm oil industries will continue dominating the global market of vegetable oils, controlling 32% of total global production of vegetable oils and 53% of global exports in 2024.
“The increase of palm oil production in a year will only reach around 1.7 million tons or even less. It is much lower than normal production during the last 10 years seen the last in 2020 at 2.9 million tons,” he said.
The global production decline is mainly caused by the decline of Indonesia’s palm oil production as the world’s largest producer and exporter of palm oil. (*)
Source: sawitku.id
