Mumbai, April 30 (Commoditiescontrol): Indonesia, the world's primary palm oil producer, experienced a sharp drop in palm oil exports during February. According to the Indonesian Palm Oil Association (GAPKI), the country witnessed a 25% decline in exports, shipping only 2.17 million metric tons compared to 2.91 million tons in February 2023.
The decline in exports is attributed to buyers switching to more affordable alternatives, such as sunflower and rapeseed oils. This price competition has adversely impacted demand from significant importers like India.
"If the other oils are cheaper, they (buyers) will automatically switch to the cheaper products," stated GAPKI chairperson Eddy Martono.
Analysts also suggest that the slowdown in global economic growth has dampened palm oil demand. Furthermore, abundant supplies of vegetable oils, mainly due to higher-than-expected soy oil output, have further impacted the market.
While exports suffered, Indonesia's domestic palm oil consumption slightly increased in February, reaching 1.86 million tons from 1.80 million tons the previous year. This rise is likely supported by higher demand for palm oil-based biodiesel.
Palm oil production in Indonesia stood at 3.88 million tons in February, and inventories climbed to 3.26 million tons, up from 3.03 million tons in January.
The outlook for Indonesia's palm oil industry faces challenges as it navigates increased price competition and potential shifts in global demand. The industry will need to carefully monitor market trends and potentially explore strategies to enhance the competitiveness of Indonesian palm oil.
(By Commoditiescontrol Bureau; +91-9820130172)
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