24 January 2020 (closed)
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Again, crude palm oil (CPO) shipments from Indonesia - the world's largest CPO producer and exporter - declined. Based on the latest data from the Indonesian Palm Oil Producers Association (Gapki), palm oil exports from Indonesia fell 16 percent on a month-on-month (m/m) basis to 2.1 million tons in January 2016. This decline was mainly caused by falling palm oil demand from the key export countries China and India.
Fadhil Hasan, Executive Director at Gapki, said he was surprised to see overall declining demand for Indonesian CPO in January as commodity prices remained stagnant, or in fact slightly falling. Normally this would boost demand for the edible vegetable oil that is used for the production of a wide variety of food and consumer products as well as for biodiesel. However, palm oil futures traded in the Kuala Lumpur exchange are near a 21-month high due to curbed output in Indonesia and Malaysia on the back of the El Nino weather phenomenon that started in June 2015 (and peaked in August-September).
Higher palm oil demand from Pakistan, the United States and Middle Eastern countries managed to curtail the overall decline in demand for Indonesian palm oil.
Indonesian palm oil shipments to Pakistan have been rising strongly over the past couple of years. CPO exports to Pakistan grew 42 percent (m/m) to 235,080 tons in January 2016 as the nation's food processing industry has been booming. A marked increase also occurred in palm oil exports to the USA. In the first month of 2016, CPO exports to the USA grew 38 percent (m/m) to 92,530 tons as the world's top economy seeks to safeguard its CPO reserves.
Indonesian Crude Palm Oil Exports in January 2016:
|Export Market||January 2016
(in metric tons)
However, exports to two of the world's largest palm oil importers - China and India - are still declining. Shipments to China fell 56 percent (m/m) to 275,600 tons of crude palm oil. According to Hasan this decline is caused by the continuation of China's slowing economic growth pace and people's declining purchasing power.
Indonesian CPO shipments to India fell 15 percent (m/m) to 383,650 tons. This is remarkable as total CPO imports into India climbed 4.5 percent to 688,393 tons in January 2016. The country boosted palm oil imports after the first back-to-back shortfall in monsoon rainfall over the past three decades trimmed the nation's oil-seed harvest.
Indonesian Palm Oil Production and Export Statistics:
(in USD billion)
¹ indicates forecast
Sources: Indonesian Palm Oil Producers Association (Gapki) & Indonesian Ministry of Agriculture
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