SINGAPORE (Nov 23): Indonesia’s palm oil exports and production in 2021 are both likely to fall for a second straight year, the vice chairman of the country’s palm oil association (GAPKI) said on Tuesday.
The expected decline at the world’s top producer is due to a sharp drop of crude palm oil exports and output issues stemming from less fertiliser use and poor plantation upkeep.
Total palm oil exports are expected to fall for a second year by 0.34% in 2021 from a year earlier, GAPKI vice chairman Togar Sitanggang told a virtual conference.
Indonesia’s crude palm oil (CPO) exports, meanwhile, are expected to plummet by 60.5% this year compared to 2020, he added, as top buyer India opts for refined products instead.
Sitanggang said the fall in exports overall were mainly due to the slump in CPO shipments.
“India somehow prefers refined palm oil,” he said, adding that export of refined palm oil products are seen up 22.2% for this year.
This is the second time GAPKI has revised their export outlook for 2021.
The association forecasted last month that 2021 total palm oil exports would rise 1.2%, despite a then-estimated drop in CPO exports of 54.4%.
Sitanggang said that the drop in CPO exports is in line with the country’s goal to cease CPO exports altogether, while beefing up shipments of value-added palm oil.
Indonesian President Joko Widodo said last month that he country aims to stop exporting CPO “at some point” in the future.
Indonesia has not yet disclosed details on how it would stop CPO exports.
Palm oil exports fell 9% in 2020 after hitting a record high in 2019, while production fell 1%.
Source : The Edge Markets