Update COVID-19 in Indonesia: 29,521 confirmed infections, 1,770 deaths (5 June 2020)
05 June 2020 (closed)
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Indonesia's crude palm oil (CPO) exports rose 9 percent month-on-month (m/m) to 2.29 million tons in February 2016 on the back of growing CPO demand in Africa, Bangladesh, India and the European Union. Indonesia's February CPO export volume was better than estimated previously. Analysts had expected a figure below 2 million tons. Combined, Indonesia's palm oil exports reached 4.39 million tons in the first two months of 2016, up 22 percent (y/y) from the 3.59 million tons of CPO that Indonesia exported in the same period one year earlier.
So far this month palm oil futures have risen nearly 9 percent on speculation that the El Nino weather phenomenon will curtail CPO output in the world's two largest palm oil growers Indonesia and Malaysia. At the start of the week palm oil futures (June delivery) rose to 2,779 ringgit (approx. USD $695) per ton in Kuala Lumpur, their highest level since March 2014 as El Nino-inflicted dry weather plagues palm trees in Southeast Asia. Today, however, palm oil futures fell after three consecutive days of gains due to the impact of the appreciating ringgit (which appreciated to its strongest level against the US dollar in seven months due to rebounding crude oil prices and the dovish comments of Fed Chair Janet Yellen regarding US interest rates). Palm oil prices fell 0.8 percent to 2,757 ringgit on Wednesday (30/03).
Fadhil Hasan, Executive Director of the Indonesian Palm Oil Producers Association (Gapki), said rising demand from Africa is a positive development (although volume-wise CPO exports to Africa remain low). Meanwhile, palm oil demand in Bangladesh rose 35 percent (m/m) as local authorities slashed the sales tax on the edible oil.
Hasan added that Indonesian palm oil exports to the Middle East fell by 35 percent (m/m), exports to the USA declined by 19 percent, to Pakistan by 11 percent, and to China by 4 percent. He commented on these declines that they are not so much the result of weakening palm oil demand from these markets but more due to Indonesia's decision to prioritize CPO supplies to the domestic market (specifically for the government's B20 biodiesel program). However, in the case of China Hasan indeed detected ongoing weakening demand for Indonesian palm oil.
Indonesian Palm Oil Export in February per Export Market:
|Export Market||February 2016
Indonesian Palm Oil Production and Export Statistics:
(in USD billion)
¹ indicates forecast
Sources: Indonesian Palm Oil Producers Association (Gapki) & Indonesian Ministry of Agriculture