Indonesia posted lower exports and production of Crude Palm Oil (CPO) and its derivatives in November 2018, with drops of four and eight percent respectively compared to the previous month, the Indonesian Palm Oil Producing Association (GAPKI) said in a press release obtained by The Palm Scribe on Tuesday (8/1).
Export of CPO and its derivatives went down by four percent to 3.22 million tons compared to the previous months because of weakening demands in main markets while production in November 2018 is estimated to drop by eight percent as part of a normal cycle that followed the completion of the main harvest period.
The drop in export and production and the higher domestic absorption because of the mandatory Biodiesel 20 percent program, has reduced the country’s CPO stock to reach 3.89 million ton by end November 2018, the GAPKI release said.
In the release, GAPKI also said that the highest percentage of the export drop was registered in Bangladesh where it went down by 58 percent, followed by the European Union with 21 percent, China with 20 percent and the United States with 10 percent.
“The lower imports by these countries is due by their high stock of vegetable oils,” the GAPKI statement said.
Meanwhile, GAPKI also said that November 2018 saw rising exports to some countries. Pakistan increased its import of Indonesian CPO by 32 percent to 326,410 ton with the organization attributing the rise too low prices and also the country’s efforts to build stock.
“Pakistan has a large population and palm oil is one of the main oils used in food, household and other industrial products,” the release said. GAPKi also stressed the importance for the government to accelerate the implementation of the Preferential Trade Agreement (PTA) with Pakistan and to probe raising it into a Free Trade Agreement (FTA) to further widen the opportunity to boost CPO exports to that country.
Increases in export were also posted for the Middle East, at 31 percent to 157,80 tons. India also increased its imports of Indonesian CPO in November, although it only rose slightly by three percent to 711,310 tons.
GAPKI also noted that global CPO prices slumped to a low of $473.6 per metric ton, the lowest level since July 2006. It said the low prices were due to the abundance of vegetable oil stocks in the world, such as palm oil, soybean oils, sunflower oil, and rapeseed oil, and further exacerbated by weak demand in the international market.
Domestically, the expansion of the mandatory Biodiesel 20 percent (B20) has boosted biodiesel absorption in November 2018 by 17 percent compared to the previous month to reach 607,000 tons.
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