The Indonesian Palm Oil Producers Association (GAPKI) said that weak growth in world palm oil demand in most major markets weakens the Indonesian CPO price in the first month of 2018.
Although palm oil started the first two weeks of the years at $675 – $692.5 per metric ton, Indonesian CPO price lost between 3,33% and 6,45% to end the month at $652.5, GAPKI said in a press release uploaded on its website on March 26, 2018.
“The lower global palm oil prices was prompted by a weak demand in the global market, especially from China and countries of the European Union,” GAPKI said in the release.
Exports of CPO and its derivatives, biodiesel, and oleochemical excluded, only reached a four% rise to 2.74 million tons in January 2018 compared to the previous month.
Demand for palm oil in China went down by 15% in January to just 307,490 tons because of the abundance of soybean oil. A weaker demand for Indonesian palm oil was also registered in the European Union in January, where imports went down by 8% to 404,220 tons while in the Middle East and in Africa, palm oil imports weakened by 31% and 10% respectively.
The weaker demand, however, was upset by rising demand elsewhere. The United States saw demand rose by 68% to 193,470 tons in January despite the dumping charges leveled against Indonesian CPO price. A large increase in demand, of 224% was also posted in Bangladesh, the release said without providing more data.
India and Pakistan both also saw a slight increase in demand in January, by respectively 1% and 3%.
In the biodiesel sector, domestic absorption of biodiesel rose by 14% to 218,00 tons in January while production went down by 10% with GAPKI attributing the lower output to the fact that the main harvest season had ended.