Indonesia’s 2018 Palm oil Exports Rise 8%, Production Hits All-Time High: GAPKI

Mumbai (Commoditiescontrol) - GAPKI- Indonesian Palm Association, monthly supply demand report for Dec’18 was published yesterday and the same was very much in-line with the market anticipations.

Indonesia’s 2018 exports of palm oils, including oleochemical and biodiesel shipments, rose 8 % from a year earlier to 34.6 million tons. On Monthly basis, however, Dec’18 exports were down by 5% at 3.06 million tons vs. 3.22 million tons exported in Nov’18.

Looking to the particular palm oil exports of CPO and its derivatives products to some major destinations year on year increase, China hold the first rank with a record increase in imports to 4.41 million tons , up by 18% on yearly basis. Moreover, year on year exports were also up to destination-Bangladesh (16%), African nations (13%), Pakistan (12%) and US (3%).

Decline in exports were accounted by India by 12% to 6.71 million tons from 7.63 million tons exported last year due to higher import tariffs imposed by the world’s biggest vegetable oil buyer. Exports to European Union countries also dropped by 5% to 4.78 million tons.

On the Consumption front, monthly consumption though declined by 19% in Dec’18 from 1.46 million tons to 1.17 million tons. The total year consumption in 2018 was observed near 13.5 million tons which was almost stagnant on y-o-y basis. Looking at the B-20 biodiesel mandatory program, the consumption of CPO for biodiesel was significantly higher on yearly basis. 2018 absorption of biodiesel in the country through B20 program reached 3.8 million tons, up by 72% compared to last year where total absorption was only 2.72 million tons.

On the Supply front, Production in Dec’18 was observed near 3.67 million tons vs. 4.16 million tons produced in Nov’18. Total yearly production was close to 43 million tons, almost higher by 12% on yearly basis, also marking highest production in history of Indonesia.

The Dec palm oil stocks were pegged at 3.26 million tons, much down from market anticipation of 3.65 million tons and Nov stocks of 3.89 million tons. Last year Dec’17 stocks was also much higher at 4.0 million tons.

Considering the present supply demand scenario, monthly decline in exports and domestic consumption though gives bearish signals to the market. However, decline in stocks from 4 million tons to 3.2 million tons shall provide temporary strength to market sentiments. Moving ahead, production in Indonesia should decrease from Jan’19 onward as per seasonal pattern. Unless monthly exports mark a rise of 12 to 15% in Jan’19, market won’t observe any significant decline in huge carry over stocks in the months ahead.

(By Commoditiescontrol Bureau)