Joko Supriyono, General Chairman of Gapki, explained that the impact of El Nino (which arrived in the region in 2015) was still felt in 2016. The 34.5 million tons of Indonesian palm oil that were produced in 2016 consisted of 31.5 million of crude palm oil (CPO) and 3 million tons of palm kernel oil (PKO).

Meanwhile, Indonesia's palm oil exports fell 5 percent (y/y) from 26.4 million tons in 2015 to 25.1 million tons in 2016 as demand in nearly all of Indonesia's key export destinations declined (with the exception of the United States and European Union), while an increasing amount of palm oil was consumed on the domestic market (for Indonesia's biodiesel program).

It is interesting to note that palm oil shipments from Indonesia to the USA rose by a whopping 43 percent (y/y) to 1.08 million tons in 2016. This sharp increase was attributed to a change in edible oil usage in the world's number one economy. The US Food and Drug Administration announced in mid-2015 that it would ban the use of (artificial) trans fat in food products. Until 2018 companies are given time to eliminate trans fat from their food products. This decision was based on research that shows the consumption of (artificial) trans fat is strongly linked to heart disease and obesity.

Meanwhile, palm oil exports of Indonesia in 2017 are targeted to reach 27 million tons. For more information about Indonesia's palm oil industry, visit our palm oil page.

Indonesia's Reference Crude Palm Oil Price:

Month      2015
     Price
(in USD/ton)
     2016
     Price
(in USD/ton)
     2017
     Price
(in USD/ton)
January      669.4      557.2      788.3
February      678.5      628.9      815.5
March      662.0      618.8
April      654.6      713.1
May      653.2      703.1
June      665.0      689.5
July      630.6      658.0
August      593.3      734.8
September      526.9      768.6
October      578.2      722.0
November      552.2      743.2
December      560.2      749.5

Source: Trade Ministry of Indonesia

Indonesian Palm Oil Production and Export Statistics:

  2008 2009 2010 2011 2012 2013 2014 2015  2016
Production
(million tons)
 19.2  19.4  21.8  23.5 26.5  30.0  31.5  32.5  31.5
Export
(million tons)
 15.1  17.1  17.1  17.6 18.2  22.4  21.7  26.4  25.1
Export
(in USD billion)
 15.6  10.0  16.4  20.2 21.6  20.6  21.1  16.5  17.8

¹ indicates forecast
Sources: Indonesian Palm Oil Producers Association (Gapki) & Indonesian Ministry of Agriculture

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