Indonesian Palm Oil Association (IPOA) reported crude palm oil (CPO) price dropped from the average US$722 a metric ton (MT) of CPO in February to $636 MT of CPO in March - Photo: Special

JAKARTA (TheInsiderStories) – Indonesian Palm Oil Association (IPOA) reported crude palm oil (CPO) price dropped from the average US$722 a metric ton (MT) of CPO in February to $636 per MT in March. In the same month, the national production in March was slightly lower 0.9 percent than February.

In the same month, the local consumption also dropped by 3.2 percent and exports increased by 3.3 percent. Export value in March slightly increased by 0.6 percent to $1.82 billion compared to previous month.

According to IPOA, palm oil production during January – March 2020 was lower than production during the same period in 2019, local consumption was higher by 7.2 percent, export volume dropped by 16.5 percent, but export value rose by 9.45 percent to $5.32 billion.

The association also reported, local consumption of palm oil for foods dropped by 8.3 percent, for oleo-chemicals increased 14.5 percent, and for biodiesel was relatively stable. The uncertainty of time to end the COVID-19 ahead of the start of fasting month had caused the drop of palm oil consumption for foods. Conversely, the oleo-chemical product increased as demand for sanitizers rose.

Of the total 68,000 tones increase of oleo-chemical consumption, 55 percent was contributed by glycerin as the raw material for making the sanitizers. Palm oil consumption for biodiesel was relatively stable, despite of low oil prices and consumption of diesel fuel dropped by around 18 percent.

Palm oil export volume rose by 83,000 MT, which was mostly contributed by CPO around 113,000 MT and oleo-chemical at 63,000 tones. The largest increase of exports was seen for destinations to Bangladesh, Africa and China.

The exports to European Union, India and the Middle East slightly rose, while exports to Pakistan and the United States dropped. The increase of exports to China was due to the reports that the world second largest economy had recovered from COVID-19 pandemic.

According to IPOA, the epidemic has disrupted the global economy, but all countries could not afford to bear the current condition for long and they have to recover soon. Therefore, increasing productivity and efficiency should be prioritized to maintain the viability of the industry.

Considering most areas of Indonesia will enter dry season in May and will reach its peak in August this year, preparations to deal with the dry season to prevent forest and land fires should be implemented as good as possible, said the association. GAPKI stated has designed and distributed the protocol on preventing forest and land fires.

Its expected that with the alertness and cooperation of all sides, the forest and land fires can be prevented and minimized this year. Amid COVID-19, palm oil still needed the plantations and mills are still in operation under normal condition. Naturally, the locations of oil palm plantation areas have a long distance from the palm oil mills so that automatically physical distancing is implemented, said IPO.

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