The Agriculture Ministry of Indonesia expects that domestic production of palm oil in 2014 will decline 10 percent (roughly two million tons) from last year due to the possible impact of the El Niño weather cycle in the second half of this year. El Niño is a weather phenomenon that occurs once every 5 years on average and involves periodical warm ocean water temperatures off the western coast of South America. This can cause climatic changes across the Pacific Ocean, impacting on the global commodities market.

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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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Indonesian Finance Minister Chatib Basri estimates that the trade balance of Indonesia may post an USD $500 million surplus in May 2014 amid improved performance of the country’s crude palm oil (CPO) exports, both in terms of price and volume (crude palm oil being one of the most important foreign exchange earners of Indonesia). Concern about Indonesia’s trade balance (and current account balance) had returned after Indonesia recorded an USD $1.96 billion deficit in the previous month.

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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 central bank of Indonesia (Bank Indonesia) expects to see a trade surplus in May 2014. Governor of Bank Indonesia Agus Martowardojo stated that he is optimistic that Indonesia’s trade balance will show positive growth after recording a shocking deficit of USD $1.96 billion in April 2014. This deficit was mainly the result of weak global demand for crude palm oil and coal, both of which are Indonesia’s most important foreign exchange earners in the non-oil & gas sector. However, this global demand is expected to have remained weak in May.

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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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The Governor of Indonesia’s central bank (Bank Indonesia), Agus Martowardojo, expects that the country’s trade balance will post a surplus of around USD $600 million in April 2014, roughly similar to the surplus that was recorded one month earlier (USD $673 million). The April 2014 surplus would be supported by an improvement in non-oil & gas exports, stable commodity prices (particularly coal and crude palm oil/CPO), as well as the waning influence of the Minerba Act.

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On 18 May 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve political and economic topics such as updates on the presidential election, the revision of Indonesia's macroeconomic assumptions, youth unemployment, palm oil, coal, company profiles of HM Sampoerna and Telekomunikasi Indonesia, and more.

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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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It is uncertain whether Indonesia can impose the B50 stage of its biodiesel program in 2026 (which would be the next step after launching the B40 stage in Q1-2025). Currently, the B50 stage is still being studied. In fact, government officials are currently discussing whether it is better to opt for a B45 stage first.

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This month, our report is completed at a time when Indonesian society is celebrating Idul Fitri, the festivities that mark the end of the holy Ramadan month (the fasting month for Muslims). In fact, the holiday period started on 21 March 2025 for school-children, while society as a whole has an official national holiday from 28 March to 7 April 2025.

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Palm oil ranks among the most important agricultural commodities of Indonesia as this country is the world’s biggest producer of palm oil. This implies that Indonesia generates important foreign exchange earnings from palm oil exports and is a source of income for millions of workers on the plantations.

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Over the past couple of months we have informed on the shortage of cooking oil on the Indonesian market, the subsequent inflationary pressures this shortage caused, and the policies that were imposed by the government to tackle this shortage. But, we did not devote an entire article to this topic.

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Both Indonesia’s export and import performance was quite amazing in March 2022. While we expected imports to rebound ahead of the start of the Ramadan month (on 1 April 2022), a month that typically gives rise to a big increase in consumption, we did underestimate Indonesia’s export performance in last month’s forecast.

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Although there is plenty of opposition to – and criticism on – Indonesia for allowing crude palm oil (or CPO) to play a big role in the domestic economy (Indonesia being the world’s largest producer and exporter of CPO), the country is currently feeling the windfall from soaring CPO prices. And, it is contributing to Indonesia’s recovery from the severe – and still ongoing – novel coronavirus (COVID-19) crisis.

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Indonesia is the world’s biggest palm oil grower as well as the world’s biggest exporter of crude palm oil (CPO). Traditionally, palm oil exports are ranked among the top three export products of Indonesia (along with coal and natural gas). As such, palm oil is of crucial importance for the Indonesian economy.

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It have not been great times for palm oil farmers and traders. Malaysia’s benchmark palm oil price is currently hovering near a three-year low of 1,949 ringgit (approx. USD $464.8) per ton amid high inventories, rising production and sluggish global demand.

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Several negative sentiments are putting pressure on the crude palm oil (CPO) price in the first week of March 2018. These sentiments are expected to continue pushing downward pressure on the CPO price in the remainder of this week. On Monday (05/03) the CPO price on the Malaysia Derivatives Exchange (May 2018 shipments) fell 0.28 percent to 2,467 ringgit per metric ton. Compared to one week earlier, the price has now declined 2.91 percent.

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In the battle between Indonesia and the European Union (EU) regarding the latter's anti-dumping duties on Indonesian biodiesel exports, Indonesia won six out of seven legal challenges. Indonesia had challenged the EU's duties, set in 2013, on biodiesel imports from Indonesia and Argentina. The World Trade Organization (WTO) ruled, largely, in favor of Indonesia.

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