The Indonesian Palm Oil Association (GAPKI) sees a gradual growth in crude palm oil (CPO) exports starting next year driven by an anticipated global economic recovery - Photo: Privacy

JAKARTA (TheInsiderStories) – The Indonesian Palm Oil Association (GAPKI) sees a gradual growth in crude palm oil (CPO) exports starting next year driven by an anticipated global economic recovery, said the secretary-general on Monday (12/21). The organization also predicted that around 37 million tones (MT) of CPO would be exported in 2021.

In this year, said Togar Sitanggang, the producers is 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 disesases.

While, the executive director, Mukti Sarjono, reported the domestic consumption in October increased by 2 percent to 1.47 MT of CPO from 1.44 MT of CPO in September. The increased occurred in food and oleochemicals products. But, he noted, the domestic biodiesel consumption fell by 4.9 percent from 630,000 tones in September to 599,000 tones in October.

He elaborated, the oleochemical consumption increased by 22.5 percent from 151,000 tones to 185,000 tones. Then, food consumption rose 3.7 percent from 667,000 tones to 692,000 tones. Sarjono said, the domestic palm oil consumption for food has shown a consistent increase since June, but the consumption has not been the same as before the pandemic.

Based on data from GAPKI, the palm oil exports in October rose by 9.5 percent to 3.02 MT of CPO compared to September which amounted to 2.76 MT of CPO. The production also rose 0.9 percent in October to 4.76 MT of CPO, but still lower 2.3 percent than the previous year.

Earlier, the Indonesian Vegetable Oil Industry Association (GIMNI) projects that the 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. 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 executive director, 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, 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.

Previously, Senior minister for economic affairs, Airlangga Hartarto, predicted Indonesia’ palm oil price will touched $ 668/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.

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