JAKARTA (TheInsiderStories) – The Indonesian Palm Oil Association (GAPKI) noted that total production of crude palm oil (CPO) and kernel oil (CPKO) reached 11.15 million tones (MT) of CPO in March 2021. The output only rose 1.5 percent compared to last year at 10.98 MT of coal.
March alone, the production at 4.02 MT of CPO, an increase of 18.9 percent from the total production in February which reached 3.38 MT of CPO and rose 12.60 percent from a year ago at 3.57 MT of CPO . Despite the increase, the chairman, Joko Supriyono, said that the final stock of palm oil has actually decreased. In March, the final stock of palm oil reached 3.2 MT of CPO from previous month was around 4.02 MT of CPO and at the end of 2020 around 4.86 MT of CPO.
“Because of this tight stock, I suspect that even the production rising but the stocks are still falling and the price sentiment is still rising,” he told the media virtually on Wednesday (04/28).
He explained, the declining stock was due to an increase in export demand and domestic consumption compared to previous year. Supriyono also said that the increase in domestic consumption is higher than the increase in production, rose 3.8 percent in March to 4.72 MT of CPO. The increase occurred from food, oleochemicals to biodiesel sectors due to the restaurant and biodiesel needs.
In this year, GAPKI also sees a gradual growth in CPO export driven by an anticipated global economic recovery. The organization also predicted that around 37 MT of CPO would be exported in 2021. The producers also estimating to export around 24.92 MT of CPO, an 18 percent decline compared to last year, as main export markets such as European Union, China and India are impacted by the diseases.
While, 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.
The organization 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, this increases in biodiesel consumption provided the B30 program was running. While, 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.
Earlier, the senior economic minister, Airlangga Hartarto, optimistic that the CPO prices in 2021 would be higher than this year. He stated, “Palm oil is expected to experience a slight increase in prices in 2021, to around US$668 per MT from $650 per MT in 2020.”
The triggered are the demand for palm oil is expected to recover and is also driven by the global economy which will be reopen starting next year. Then, sustainability of biodiesel policies in Indonesia also an increases demand by the major trading partners.
Hartarto said palm oil has had a huge impact on the Indonesian economy. In addition, the contribution of these sector to exports values reached $20 billion per year.
In this month, Indonesian government set the reference price for CPO products for export duties US$1,093.83 a MT of coal, or up 5.56 percent from March at $1,036.22 per MT of CPO. The director general a the ministry, Didi Sumedi, said in caused the benchmark price of CPO exceeded the threshold at $750 per MT, the government imposes export duties at $116 a MT of CPO in April.
Written by Editorial Staff, Email: firstname.lastname@example.org