Indonesian Indonesia' Palm Oil Fund Management, reported total export valued of palm oil and its derivative products during 2020 stood at US$22.97 billion or jumped 13.6 percent from a year ago - Photo by the Organization

JAKARTA (TheInsiderStories) – Indonesia’ Palm Oil Fund Management, reported total export valued of palm oil and its derivative products during 2020 stood at US$22.97 billion or jumped 13.6 percent from a year ago. According to the head, Eddy Abdurrachman, the figure was supported by the increasing prices of palm oil products in the international markets.

In term of volume, the palm oil export was 34 million tones (MT) of crude palm oil (CPO), lower than 2019 at 37.39 MT of CPO. He noted, the Indonesian palm oil industry has begun to recover after facing the difficult situation during the virus outbreak.

In this year, the Indonesian Palm Oil Entrepreneurs Association (GAPKI) 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.

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