After the World Trade Organization (WTO) had ruled, largely, in favor of Indonesia (in January 2018) in the battle between Indonesia and the European Union (EU) regarding the latter's anti-dumping duties on Indonesian biodiesel exports, Indonesia has now also won its appeal at the EU court. The European Court of Justice, the highest court in the EU, ruled that the bloc needs to scrap its anti-dumping duties on imports of Indonesian biodiesel products that range between 8.8 - 23.3 percent.

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After receiving criticism from various stakeholders, the Indonesian government reportedly decided to postpone the implementation of a new regulation that requires all domestic coal, palm oil and rice exporters to use ships that are owned by local sea shipping companies and requires them to use domestic insurance.

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Wilbur Ross, US Secretary of Commerce, stated that the US Department of Commerce issued an affirmative final anti-dumping duty on biodiesel shipments that originate from Indonesia. The statement was released overnight (21/02). The decision was made to improve the situation of local US biodiesel producers as their business was undermined by cheap biodiesel imports from Indonesia (and Argentina).

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Although the crude palm oil price remains under pressure at the start of 2018 (as palm oil stocks touched their highest level in over two years last December), prospects for the crude palm oil industry seem positive in 2018. Meanwhile, 2017 can be labeled the year of recovery for stakeholders in the palm oil industry after having been plagued by El Nino-related weather trouble in the preceding year.

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Based on statements from a government agency, Indonesia's biodiesel consumption is set to decline in the second half of 2017 due to some "technical issues". While in the first six months of 2017 biodiesel consumption in Indonesia reached 1.67 million kiloliters, this figure is expected to fall to 0.86 million kiloliters in the second half of the year, hence resulting in an estimated total of 2.53 million kiloliters in full-year 2017.

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On Monday (23/10) the US Commerce Department issued a preliminary ruling and decided to set anti-dumping duties of 50.71 percent on biodiesel imports from Indonesia. Meanwhile, the USA also set anti-dumping duties, ranging between 54.36 to 70.05 percent, on soy-based biodiesel imports from Argentina.

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The Indonesian Palm Oil Producers Association (Gapki) said Indonesia's exports of crude palm oil (CPO) and its derivatives rose 24 percent month-on-month (m/m) to 2.98 million tons in August 2017 (from 2.40 million tons in the preceding month).

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So far, an area of 1.9 million hectares of oil palm plantations, which can produce up to 8.2 million tons of crude palm oil (CPO), has been certified under the Indonesia Sustainable Palm Oil (ISPO) scheme. As of August 29, 306 ISPO certificates have been granted to 304 Indonesian oil palm companies, one plasma farming association, and one farmer self-help cooperative. The above-mentioned figure includes the 40 ISPO certificates that were submitted today to local palm oil companies.

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India's decision to double import duties on crude palm oil (CPO) from 7.5 percent to 15 percent earlier this month should have a big impact (India being the world's largest palm oil importer). The move is an effort to protect domestic palm oil farmers. India also raised the levy on refined, bleached and deodorized (RBD) palm olein by 10 percent to 25 percent.

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The crude palm oil (CPO) price continues to decline, falling more than 1 percent on Monday morning (24/07). The CPO futures contract (October 2017 delivery), the most active contract on the Bursa Malaysia, had shed 1.05 percent or 27 points to 2,546 ringgit per ton by 11:20 am local Jakarta time.

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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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Indonesia's crude palm oil (CPO) exports rose 9 percent month-on-month (m/m) to 2.29 million tons in February 2016 on the back of growing CPO demand in Africa, Bangladesh, India and the European Union. Indonesia's February CPO export volume was better than estimated previously. Analysts had expected a figure below 2 million tons. Combined, Indonesia's palm oil exports reached 4.39 million tons in the first two months of 2016, up 22 percent (y/y) from the 3.59 million tons of CPO that Indonesia exported in the same period one year earlier.

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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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Although the palm oil industry of Indonesia is resented by many for the negative impact it has on mother nature (for example the seasonal forest fires that occur on parts of Sumatra and Kalimantan), it also constitutes a vital industry: across the globe crude palm oil (CPO) is used for the production of a wide variety of products from food, cooking oil to cosmetics or biodiesel. Indonesia is the world's largest producer and exporter of CPO. This column is the first installment in a series, written by Senior Consultant William Yang, that discusses Indonesia's palm oil industry, particularly the different business models, the risks, and how to invest safely in this industry.

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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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Agribusiness company Astra Agro Lestari, one of Indonesia's leading crude palm oil (CPO) producers, is expected to show a better performance in 2016 on an expected rise in palm oil prices. Although palm oil futures currently feel the negative effects of tumbling global crude oil prices, these futures are estimated to have risen to about 2,700 ringgit per ton by May 2016 from around 2,385 (approx. USD $540)  per ton currently.

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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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With the forest fires still raging on parts of the Indonesian islands of Sumatra and Kalimantan, damaging the tropical environment, while the toxic haze still spreads to other parts of Southeast Asia, having caused an estimated 500,000 cases of respiratory tract infection as well as 19 casualties, the ongoing disaster has been labelled a crime against humanity. A new and interesting research report, released by Dr. Herry Purnomo (scientist at the Bogor-based Center for International Forestry Research), points to a link between local elections and spikes in Indonesian forest fires.

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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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Crude palm oil (CPO) output in Indonesia, the world’s largest CPO producer and exporter, may decline by 20 percent to 27.5 million tons in 2016 due to the negative impact of the El Nino weather phenomenon. On a positive note, declining CPO output in Indonesia could provide some support for benchmark Malaysian palm prices that fell to a 6.5-year low of 1,836 ringgit last week.

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