The Indonesian Palm Oil Association (Gapki) expects that Indonesian exports of crude palm oil (CPO) and palm oil derivatives will increase between 10 and 15 percent to 11.29 million tons in the second half of 2014 from 9.82 million tons in the first half of this year. If achieved, then total CPO exports (and derivatives) from Southeast Asia’s largest economy in 2014 would be 21.11 million tons. Assuming an average CPO price of USD $895 per ton, these exports can be worth USD $18.89 billion in total.

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Indonesia Investments has updated the company profile of Sampoerna Agro in the Indonesian Companies section. Sampoerna Agro, part of the Sampoerna Strategic Group, is one of the country’s leading producers of palm oil and palm kernel. It further produces rubber and sago. It operates a total of 120,225 hectares of oil palm estates, 2,810 hectares of rubber estates and 10,351 hectares of sago estates, mostly located on the islands of Sumatra and Kalimantan, and owns six palm oil mills.

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The Indonesian Palm Oil Board (DMSI) expects exports of Indonesian crude palm oil (CPO) as well as its derivatives to fall about six to ten percent to 19-20 million tons in 2014 (from last year's export realization of 21.2 million tons). Lower CPO exports are primarily the result of Indonesia's mandatory biodiesel program which leads to increased domestic consumption of CPO. Traditionally, Indonesia exports about 75 percent of its total CPO production, particularly to the giant economies of China and India.

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Indonesian crude palm oil (CPO) exports may have increased 3.4 percent (month-to-month) to 1.85 million metric tons in April 2014 according to the median forecast of five analysts and traders compiled by Bloomberg. Exports are forecast to increase as buyers boost purchases ahead of the holy Muslim fasting month Ramadan in June and Idul Fitri celebrations. These festivities always trigger increased demand for palm oil. If this projection is accurate, it would imply that Indonesian CPO exports in April are the highest since December 2013.

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Demand for Indonesian crude palm oil (CPO) - both global and domestic demand - surged, giving rise to impressive corporate earnings reports of Indonesian palm oil producers in the first quarter of 2014. Combined, net profit of plantation companies that are listed on the Indonesia Stock Exchange, rose 116 percent. Indonesia's plantation sector is dominated by production of crude palm oil products and derivatives. Because of increased global demand, the value of Indonesian CPO exports is expected to rise to USD $22-24 billion.

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Indonesian companies engaged in the production of crude palm oil (CPO) recorded impressive financial figures in the first quarter of 2014. Combined, 13 CPO companies that are listed on the Indonesia Stock Exchange posted IDR 3 trillion (USD $260.9 million) in net profits over the first quarter of 2014, a 116.1 percentage growth from the same period last year. Main reasons for this growth are the sharply depreciated Indonesian rupiah exchange rate in combination with the rising global CPO price and looming new El Niño cycle.

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Indonesia Investments updated the company profile of Astra Agro Lestari in our Indonesian Companies section. Astra Agro Lestari is Indonesia's largest agribusiness company by value. The company, majority-owned by diversified conglomerate Astra International, is engaged in palm oil and rubber plantations as well as industrial activities. It currently manages a total plantation area of 281,378 hectares - including nucleus and plasma - in Sumatra, Kalimantan and Sulawesi.

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The Indonesian Palm Oil Association (Gapki) stated that exports of Indonesian crude palm oil (CPO) and its derivatives have increased 13 percent to 1.79 million tons in March 2014 from 1.58 million tons in the previous month. The increase was particularly due to a surge in the price of soybeans since February which makes importers shift their focus to CPO and its derivatives as a substitute for soybeans. Moreover, CPO prices have risen due to speculation about the looming El Niño cycle and declining stockpiles in Indonesia and Malaysia.

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Concerns about the arrival of a new El Niño weather phenomenon have increased in recent weeks. A possible new El Niño cycle has a major impact on the global commodities market. El Niño - a weather phenomenon that occurs once every five years on average - involves periodical warm ocean water temperatures off the western coast of South America which can cause climatic changes across the Pacific Ocean. Its impact on harvests and the world varies; sometimes passing almost unnoticeable (such as in 2010) but it can also be felt worldwide.

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Indonesia Investment updated the company profile of PT BW Plantation Tbk. BW Plantation is a mid-sized agricultural company that is engaged in Indonesia's palm oil sector. Its primary business activities are the development, cultivation and harvesting of fresh fruit bunches (FFB), and extraction of crude palm oil (CPO) as well as palm kernel (PK). The company is equipped with three CPO mills with a total processing capacity of 135 tons per hour. In 2014, a fourth and fifth processing plant are under construction.

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The crude palm oil (CPO) price touched its highest level so far this year. On Tuesday (20/09) palm oil futures (December delivery) - traded on the Kuala Lumpur exchange - ended the day at 2,690 ringgit (approx. USD $651 per metric ton). Palm oil prices are rising as CPO production in Indonesia and Malaysia will remain subdued this year due to droughts that were brought by the El Nino weather phenomenon earlier in 2016, while there is expectation of a rather wet season later this year due to the La Nina weather phenomenon.

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Expectation of rising fresh fruit bunches (FFB) and crude palm oil (CPO) volumes in the second half of the year should boost the corporate earnings of Astra Agro Lestari, one of Indonesia's leading agribusiness companies. Meanwhile, sentiments related to the La Nina weather phenomenon and rising CPO demand on the back of the Indonesian government's biodiesel program should support CPO prices. Astra Agro Lestari is the plantation unit of diversified conglomerate Astra International.

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Indonesian President Joko Widodo has ordered the nation's Minister of Environment and Forestry Siti Nurbaya to issue a moratorium on new palm oil concessions in a number of provinces. Although Widodo wants Indonesia - the world's top producer and exporter of crude palm oil (CPO) - to raise CPO output, he believes this increase can be achieved by increasing productivity of existing palm oil plantations, not by adding new plantations. Indonesia is often criticized by environmentalist groups for its forestry policies and poor law enforcement (which led to the severe haze that spread through Southeast Asia last year).

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Crude palm oil (CPO) production in Indonesia and Malaysia is expected to decline due to the impact of the El Nino weather phenomenon (that brought a prolonged dry season to Southeast Asia). CPO production in Malaysia could fall between 1.5 and 2 million tons this year according to Dorab Mistry, Director at Godrej International. Declining output in the world's two leading palm oil producers and exporters implies that palm oil prices should be able to rise further. At the start of this week palm oil futures traded in Kuala Lumpur (June delivery) rose to 2,779 ringgit (approx. USD $695) per ton, the highest level since March 2014.

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The crude palm oil business received a blow when France announced it plans to impose progressive tax on imports of crude palm oil and its derivatives. French authorities approved a bill on 21 January 2016 that will raise the import tax on palm oil from around 100 euro per ton currently to 300 euro per ton in 2017. This tariff will then be raised to 700 euro per ton in 2019, and to 900 euro per ton in 2020. Through this tax hike France aims to discourage the palm oil industry, hence curtailing global deforestation as well as to protect its citizens from the negative health effects caused by the consumption of palm oil.

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The world's two largest crude palm oil (CPO) producers and exporters - Indonesia and Malaysia - signed an agreement on Saturday (21/11) for the establishment of an intergovernmental palm oil council, called the Council of Palm Oil Producer Countries (CPOPC), that aims to control the global CPO supply, stabilize prices, promote sustainable practices in the palm oil industry, and enhance the welfare of oil palm smallholders. Both countries will invest USD $5 million each for the set up of this new council. Its headquarters will be located in Jakarta.

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Indonesia and Malaysia, the world's leading crude palm oil (CPO) producers and exporters, will cooperate for the development of a special economic zone on Indonesian territory to boost the palm oil industry's downstream industry. Private companies will be given incentives to invest in this zone and develop industries to process CPO into olein, a key ingredient for the production of cosmetics and margarine. Furthermore, both countries plan to establish the Council of Palm Oil Producer Countries.

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Hasil produksi minyak sawit mentah (crude palm oil/CPO) di Indonesia, produsen dan eksportir CPO terbesar di dunia, mungkin turun sebanyak 20% menjadi 27,5 juta ton di 2016 karena dampak negatif dari fenomena cuaca El Nino. Sebagai catatan positif, penurunan hasil produksi CPO di Indonesia dapat mendukung harga CPO yang telah jatuh ke level terendah selama 6,5 tahun terakhir pada 1.836 ringgit minggu lalu.

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Malaysia, the world’s second-largest crude palm oil (CPO) producer and exporter, will continue its duty-free export tariff for CPO in January 2015 according to information from the Malaysian customs department. Starting from September 2014 Malaysian authorities have implemented a duty-free CPO export policy in an effort to boost global demand and support international CPO prices (which have fallen nearly 20 percent this year). Indonesia, which has seen duty-free CPO shipments since October 2014, is expected to follow suit.

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Reserves of crude palm oil (CPO) in Indonesia may have declined for a second straight month in October on the back of drought and an increase in exports from Southeast Asia’s largest economy. The delayed impact of drought (which even managed to dry up several rivers in West Kalimantan in October) limited production of CPO in recent weeks. Meanwhile, exports have increased after Indonesia and Malaysia - the world’s two top palm oil producers - scrapped export taxes to boost demand for this commodity.

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