The Palm Scribe

GAPKI Sees Modest Rise in Indonesian Palm Oil Production in 2022

The Indonesian Association of Palm Oil Producers (GAPKI) is forecasting the country’s palm oil production to rise a modest 4.87 percent in 2022 to reach 49 million tons of crude palm oil (CPO) and 4.8 million tons of Palm Kernel Oil (PKO.)

This modest growth, according to a GAPKI press release, was attributed to constraints in fertilizing in 2021 following shortages and high fertilizer prices as well as the extremely wet weather conditions early this year.

GAPKI estimated consumption of palm oil for the food sector in 2022 to maintain about the same level as in 2021, that is at around 800,000 tons per month, or 9.6 million tons for the entire year of 2022. Oleochemicals are expected to consume about the same volume as in the second half of 2021, that is at around 180,000 tons per month, bringing the total estimate for 2022 to 2.16 million tons.

The palm oil consumption of Indonesia’s biodiesel industry will depend on the government’s mandatory biodiesel program with for 2022 is estimated to absorb 8.83 million tons.

In total, domestic consumption of palm oil in 2022 is estimated then to reach around 20.59 million tons. With production at 53.8 million tons and consumption at 20.59 million tons, there will be about 33.21 tons left for export or three percent less than in 2021.

National production of CPO in 2021 reached 46.888 million tons or 0.31 percent down from 2020 mainly because of the limited fertilizing in 2019 and 2020 as well as weather factors.

Domestic palm oil consumption in 2021 reached 18.422 million tons or six percent more than in the previous years. Consumption of palm oil for food rose by six percent, for oleochemicals 25 percent and for biodiesel two percent.

The government’s consistency in applying the mandatory biodiesel program has contributed in reducing supplies and thus affect the world vegetable oil export market. Indonesian palm oil product exports in 2021 — CPO, CPO derivative products, PKO, oleochemicals and biodiesel reached 34.2 million tons or a mere 0.6 percent growth oer exports in 2020. The low growth level was caused by limited supplies, high prices and the narrowing price difference between palm oil and other vegetable oils, especially soy bean oil.

Exports of palm oil in 2021 only grew by 0.6 percent in volume from 2020, reaching $35 billion but in terms of value this was 52 percent up from the previous year. The substantial increase in revenues from palm oil exports was mainly supported by the high average price of palm oil in 2021 that stood at $1,194 per ton or 67 percent higher than the average price in 2020.

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