Indonesia set the reference price of crude palm oil (CPO) for export duty at US$568.94 per metric ton (MT) of CPO in June, said trade ministry on Monday (05/29) - Photo by GAPKI Secretariat

JAKARTA (TheInsiderStories) – Indonesian Palm Oil Association, locally known as GAPKI noted the country’s palm oil exports hit 2.92 million tons in July, 15.87 percent higher than the previous month, its latest data showed on Tuesday (09/17). Cumulatively, the export volume during January-July reached 19.76 million tons, an increase of 6.7 percent over the same period last year.

GAPKI executive director Mukti Sardjono said that biodiesel exports made the biggest contribution to the increase in the monthly export volume of palm oil and its derivatives in July. Noted, the monthly export volume of biodiesel increased by 93 percent to 187,000 tons in July from the previous month.

The increase in that period was followed by an increase in crude palm oil exports by 56 percent to 678,000 tons, palm kernel oil both crude and processed by 11.2 percent to 129,000 tons and processed palm oil, both solid and liquid, by 5.5 percent to 1.7 million tons. The only palm oil product that experienced a decline was oleochemicals which fell 18 percent to 219,000 in July.

Sardjono also noted that on a monthly basis export increases were observed highest in China, India, and Bangladesh.

“African swine flu reduced soybean oil production in China, resulting in China increasing palm oil imports from Indonesia by almost 50 percent in June,” he said in a statement.

He went on saying that the biggest increase in export volume of palm oil and its derivatives from Indonesia occurred in Bangladesh by 264 percent, India by 77 percent despite tariff discrimination, Africa by 32 percent, other countries except for the European Union (EU) by 41 percent, and the EU is 17 percent.

However, American soybean producers present a new rival to Indonesian palm oil as the former ramps up exploration into new markets due to the closure of Chinese markets as part of the ongoing United States (US) – China trade war.

The statement also noted production rose 8.5 percent month-to-month (mtm) to 4.31 million tons in July this year, despite being only 0.7 percent higher than the same month last year.

Meanwhile, domestic consumption hit 1.43 million tons in July, marginally higher by 0.3 percent mtm but significantly higher by 42.2 percent compared to the same month last year.

Sardjono said American government solutions to reduce soybean stock, China’s success to solve African swine flu and higher pork prices and Indonesia’s implementation of the 20 percent bio-content (B20) and B30 shall determine the balance of the palm oil industry

Regardless of this possibility, he urged the government to immediately increase productivity, make production efficiency to reduced production costs so that palm oil and its derivative products from Indonesia can be more competitive.

Written by Lexy Nantu, Email: