JAKARTA (TheInsiderStories) - The Indonesian Palm Oil Association (GAPKI estimates that the crude palm oil (CPO) price will be in the range US$850 to $900 per metric ton (MT) of CPO in this year, supported by a number positive catalysts, said the deputy chairman yesterday. One of major driver is the improvement demand from the global supplier.
According deputy chairman, Togar Sitanggang, if the COVID-19 vaccination program is successful and world economic growth recover, coupled with the domestic use for fuel with a 30 percent bio energy (B30), he believed the world demand will rise. However, he said, there are also other things could affect the palm oil prices, like an increase in soybean price.
Earlier, the coordinating minister for economic affairs, Airlangga Hartarto, was also optimistic that CPO prices will be higher than 2020. He said, there are several factors, like the rising demand for palm oil, the reopen global economy, the sustainability of biodiesel policies in Indonesia, and the increase demand by major trading partners.
The CPO and derivative products also contributes to export values, around $20 billion per year. Recently, the Indonesian Vegetable Oil Industry Association (GIMNI) projects that CPO production in 2021 will grow by around 3 percent to 48.4 MT of CPO from this year’ 47 MT of CPO, inline with the increasing of prices and the conducive climate.
Crude Palm Kernel Oil production also will increase by about 4 percent from 4.6 MT of CPO to 4.8 MT of CPO in 2021. Executive director of GIMNI, Sahat Sinaga, also believed that there will be an increases in domestic palm oil consumption by around 14 percent to 19.75 MT of CPO in 2021.
Its projected that starting next year, the domestic consumption palm oil for food will be around 8.8 MT of CPO, for non-food items around 1.67 MT of CPO and for biodiesel around 9.2 MT of CPO. According to him, the increases in biodiesel consumption provided the B30 program was running.
Then, palm oil exports in 2021 will also increase by 11 percent to 36.7 MT of CPO due to an increase in downstream palm oil product exports by around 16.6 percent to 29.29 MT of CPO. In addition, the CPO exports will experienced a decline of around 8 percent to 7.4 MT of CPO.
Written by Editorial Staff, Email: theinsiderstories@gmail.com
