Indonesian Palm Oil Export Hit Record High

Production and exports of palm oil from Indonesia showed positive growth in July 2018. Palm oil products export volume hit the monthly record high in July, at 3,22 million tons or rose 27 percent from 2,54 million ton in July 2017. This was also hit yearly record high for 2018.  The products include Crude Palm Oil (CPO), Palm Kernel Oil (PKO) and its derivatives, oleochemical, and biodiesel. For year on year, Indonesian CPO export and its downstream products (biodiesel and oleochemical) rose only 2 percent until July 2018, compared to July 2017. The export volume for period January-July 2017 reached 18,15 million ton, compared to same period of 2018 that rose 18,52 million ton. On production side, the total production on July 2018 was projected to reach 4.28 million tons. It was also the highest production record of CPO and PKO since beginning 2015. According to data released by the Indonesian Palm Oil Association (GAPKI), Tuesday (28/8/2018), there were at least three reasons affected the positive performance. Firstly, the price of palm oil prices were so low. Secondly, India turned to palm oil again since it increased import tax to other vegetable oils. Thirdly, China is increasing the use of biodiesel. India, which reduced palm oil import from Indonesia on June, was back to import Indonesian palm oil again on July and recorded 652.73 thousand tons. This was the highest ever in 2018. While, shipments of CPO, PKO, and its derivatives to China from Indonesia climbed 6% or 330.43 thousand tons from 330,43 thousand tons on June to 350,12 thousand tons on July. This was because China increased the use of biodiesel in last two months. For the first time, China purchased Indonesian palm oil around 185 thousand tons on June. It increased to 210 thousand tons on July. Shipments of CPO, PKO, and its derivatives on July also increased to Africa and Bangladesh that rose significantly 137% dan 86%. On the other hand, export to Pakistan, US and European Union declined. The drop in exports to the US is more due to high soybean stocks in the country. ***