Derom Bangun, Chairman of the Indonesian Palm Oil Board (an umbrella organization of the major Indonesian palm oil associations), said the country's CPO output will rise to 33 million tons in 2016 as new trees, planted in the years 2010-2011, will boost production figures. However, the El Nino phenomenon will limit production growth.

Over the past two months palm oil prices have rebounded to around 2,300 ringgit (approx. USD $543) per ton on concern about drought impacting on palm oil producing regions. However, with record inventory levels, near-record production figures, low global demand, and high stockpiles of soybeans, a further rising price is difficult.

As a result of the news shares of PP London Sumatra Indonesia rose 9.56 percent, Astra Agro Lestari climbed 5.84 percent, Sampoerna Agro were up 2.28 percent, and Gozco Plantations rose 2.17 percent on Wednesday (21/10).

Indonesian Palm Oil Production and Export:

    2008   2009   2010   2011   2012   2013   2014   2015¹
(million metric tons)
  19.2   19.4   21.8   23.5   26.5    27.0    31.0    31.5
(million metric tons)
  15.1   17.1   17.1   17.6   18.2    21.2    20.0    19.5
(in USD billion)
  15.6   10.0   16.4   20.2   21.6    19.0    21.0   

¹ indicates forecast
Sources: Food and Agriculture Organization of the United Nations, Indonesian Palm Oil Producers Association (Gapki) and Indonesian Ministry of Agriculture

Further Reading:

Overview and Analysis of Indonesia's Palm Oil Industry