Palm oil production and exports decline in Indonesia

Indonesia’s crude palm oil (CPO) and palm kernel oil (PKO) production declined by 8% to 2.2 million tons in February, according to the Indonesian Association of Oil Palm Producers (GAPKI).

Exports of palm products, including oleo chemicals and biodiesel, dropped by 6% to 2.66 million tons between January and February. 

“The drop in exports is more due to the rise in export duties to US$18 (EUR16.92) per ton in the second month. This made producers and traders delay their sales and purchases,” said GAPKI executive director Fadhil Hasan, according to the Jakarta Post.

Despite the rise in US tariffs triggering a 46% drop in exports to the country, exports to the Middle East actually rose drastically between January and February, by 116% to 224,730 tons. Exports to Bangladesh increased by 23%, China 9% and African countries 3%, according to the Jakarta Post article.

GAPKI is predicting CPO prices to stagnate at between $680 (EUR 639) and $720 (EUR 677) per ton in the first two weeks of April after remaining at between $685 (EUR 644) and $750 (EUR 705) per ton through March. Prices were at $725 (EUR 682) to $820 (EUR 771) per ton in February.

The Jakarta Post says the Indonesian government has issued an April CPO price reference of $762.88 (EUR 717.14), and lowered export duties to $3 (EUR 2.82) per ton.