The Palm Scribe

Don’t rely on trade war

Bisnis Indonesia, 5 November 2018

Godrej International Director Dorab Mistry in his speech during a discussion on 2019 crude palm oil (CPO) price and supply outlook at the Indonesian Palm Oil Conference (IPOC) 2018 in Nusa Dua, Bali last week warned palm oil industry not to pin their hopes on impacts of the US-China trade war to boost CPO business.

He argued that the trade war won’t last, and that the US will surrender due to soybean oversupply, which will reduce the income of US soybean farmers. He explained that El Nino will help CPO producers in Indonesia and Malaysia reduce their production to around four million metric tons in 2019.

Meanwhile, LMC International Chair James Fry predicted the trade war to continue next year and will significantly reduce China’s soybean import from the US. He also warned Indonesia not to rely on raising price and reducing CPO supply through the mandatory 20% and 30% biodiesel blend (B20 and B30), which applies this year and in 2019, respectively.

Furthermore, Indonesian Palm Oil Association (GAPKI) Chair Joko Supriyono suggested domestic CPO industry expand to new markets and maintain old markets instead of relying on the uncertain factor of the trade war.

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