Update COVID-19 in Indonesia: 4,223,094 confirmed infections, 142,413 deaths (06 October 2021)
17 October 2021 (closed)
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Based on the latest data from the Indonesian Oil Palm Estate Fund (BPDP-KS), Indonesia exported 25.7 million tons of crude palm oil (CPO) in full-year 2016, a 1.9 percent year-on-year (y/y) decline from 26.2 million tons of CPO shipments in the preceding year. However, in terms of value Indonesia's CPO exports actually surged 8 percent (y/y) to USD $17.8 billion in 2016. Indonesia is the world's largest exporter and producer of palm oil, followed by Malaysia.
Bayu Krisnamurthi, President Director of the BPDP-KS, said the drop in export volume is primarily caused by falling CPO production in Indonesia. Volatile weather conditions are behind this declining CPO production: after a dry spell (caused by the El Nino weather phenomenon), there emerged wetter-than-usual conditions (La Nina) in the last quarter of 2016.
Read more: Overview of Indonesia's Palm Oil Industry
However, falling CPO output in Indonesia had a positive impact on palm oil prices. Indonesia's reference CPO price rose around 35 percent to USD $750 per ton in December 2016 (from USD $557 per ton in January).
Krisnamurthi warned that the rising CPO price actually also implies weakening competitiveness for Indonesian palm oil in the global vegetable oil market: when palm oil prices rise, then soybean oil becomes more attractive.
At the end of December 2016 Indonesia's Ministry of Trade announced to re-introduce the USD $3 per ton export tax for CPO shipments in January 2017 as the government's reference palm oil price exceeded the USD $750 per ton threshold that separates the existence of export duties from zero rates.
Meanwhile, Krisnamurthi added that domestic consumption of subsidized (unblended) biodiesel in Indonesia reached 2.7 million tons in 2016, surpassing the target of 2.5 million tons.
Indonesia's Reference Crude Palm Oil Price:
Source: Trade Ministry of Indonesia
Indonesian Palm Oil Production and Export Statistics:
(in USD billion)
Sources: Indonesian Palm Oil Producers Association (Gapki) & Indonesian Ministry of Agriculture