Senior minister for economic affairs, Airlangga Hartarto, predicted Indonesia' crude palm oil (CPO) will touches US$668 a metric ton (MT) of CPO in 2021 from the current price around $650 MT of CPO - Photo by CMEA Office

JAKARTA (TheInsiderStories) – Senior minister for economic affairs, Airlangga Hartarto, predicted Indonesia’ crude palm oil (CPO) will touches US$668 a metric ton (MT) of CPO in 2021 from the current price around $650 MT of CPO. After suffered by the COVID-19 pandemic, the demand of the palm oil is expected to recover.

The rising in CPO prices was also supported by the continuation of the biodiesel policy has implemented by the government through the mandatory biodiesel 30 (B30) program. To support the growth in this sector, said the minister, the government has issued various policies and will provide funds for the replanting program that has been launched in North Sumatra, Riau and South Sumatra by President Joko Widodo.

Currently, the Indonesian palm oil industry has begun to recover after facing the difficult situation during the virus outbreak. Based on Indonesian Palm Oil Entrepreneurs Association (GAPKI) report, CPO production in September was 4.73 MT of CPO from the previous month amounted to 4.38 MT of CPO

In the same month, he export values rose by 10 percent to $1.87 billion from August was $1.70 billion. In the first nine months total export values of the CPO and its derivatives  worth of $15.50 billion from the same period in 2019 amounted to $14.46 billion.

According to the executive director of the organization, Mukti Sardjono, said export volume declined was influenced by COVID-19 outbreak and the rising of CPO prices. He also reported, the export values of palm oil dropped to US$1.69 billion than July with total amount of $1.86 billion.

He continued, the average price in August stood at $703 per MT of CPO (from previous month at $659 a MT of CPO. Based on export destination, he added, exports to India fell by 36.4 percent, China dropped by 1.7 percent, and Middle East decreased by 36.13 compared to July and 11 percent in annual basis.

Based on type, CPO exports down by around 146,000 tones, processed CPO exports fell by 242,000 tones, lauric dropped by 58,000 tones, and oleochemical exports still experienced an increase of around 5,000 tones. In August, Sardjono said, the domestic consumption around 1.38 million tons or fell by 3.3 percent from 1.43 million tons in July.

He elaborated, the consumption of palm oil for food increased by 1.9 percent to 654,000 tones, oleochemicals up by 2 percent to 151,000 tones. In contrast, biodiesel consumption fell by 9.8 percent to 576,000 tones. In the same month, the production reached 4.8 million tones or 13.74 percent higher than the previous month and jumped by 2.1 percent than August 2019.

“The increase in production occurs not only because it follows the cycle of the season but also because the plants have shown a recovery after the first semester of 2020 fertilization returns to normal,” he said in an official statement.

Sardjono also reported, Indonesia’ palm oil product exports have reached 21.31 million tones during January to August. Its 11 percent lower than 2019 with the main contributor CPO processed products, which experienced a 16.1 percent decline.

Written by Editorial Staff, Email: theinsiderstories@gmail.com