Indonesia’s Palm Oil Exports Increase 16% in Q1 2019

INDONESIA’S first quarter palm oil export and its derivatives reached 9,1 million tons, increased 16% (year-on-year/yoy), according to data released by the Indonesian Palm Oil Association (Gapki). On its statement quoted by Katadata, (16/5/2019), Gapki said that Indonesia’s palm oil industry is hammered by the global slowdown and the threat by the European Union (EU). Early this year, the industry was hammered by the EU`s Renewable Energy Directive II (RED II). According to Gapki’s Executive Director Mukti Sardjono, the negative sentiment from RED II has hammered Indonesia’s export performance. In March 2019, global CPO price decreased to US$510 – US$550 per metric ton on average price of US$528,4 per metric ton. It decreased 5% from average price of US$556,5 per metric ton in February. The slowdown in India’s growth has decreased palm oil demand both from Indonesia and Malaysia. A sharp decline in export of CPO and its derivatives was also recorded to African countries by 38%, the United States by 10%, China by 4%, and the EU by 2%. However, palm oil export to other countries increased 60% from previous month. Gapki recorded an increase in export of CPO and its derivative products to Asian countries including South Korea, Japan, and Malaysia. “Under such circumstances, Indonesia’s palm oil export grew although it is less than expected,” Mukti added. Meanwhile, domestic absorption of biodiesel in March dropped 19% to 527 thousand tons from 648 thousand tons in February. “It might be because of a delay in the order placed by Pertamina so that the distribution was also delayed.” ***