Togar Sitanggang, Executive Secretary at Gapki, said palm oil shipments to China in fact touched a record this year as exports to the world's second-largest economy rose 169 percent (m/m) from 167,280 tons to 449,200 in August 2017. Shipments to China rise because the nation is safeguarding sufficient palm oil reserves at home.

Meanwhile, Iskandar Andi Nuhung, Executive Director of the Indonesian Palm Oil Board (DMSI), added that Indonesian palm oil shipments to China are triggered by China's demand for biodiesel. Palm oil is not only used for cooking oil but also by the bioenergy industry, pharmacology industry and cosmetics industry. Moreover, the global economy is relatively stable now and therefore does not disturb palm oil demand.

Besides China, India is also showing growing demand for Indonesian palm oil, even though the world's largest palm oil importer implemented higher import duties. Earlier this year, India doubled import duties on CPO from 7.5 percent to 15 percent in an effort to protect its domestic palm oil farmers. India also raised the levy on refined, bleached and deodorized (RBD) palm olein by 10 percent to 25 percent.

Indonesian Palm Oil Production and Export Statistics:

  2008 2009 2010 2011 2012 2013 2014 2015 2016
(million tons)
 19.2  19.4  21.8  23.5 26.5  30.0  31.5  32.5  31.5
(million tons)
 15.1  17.1  17.1  17.6 18.2  22.4  21.7  26.4  26.6
(in USD billion)
 15.6  10.0  16.4  20.2 21.6  20.6  21.1  16.5  18.6

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