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CPO output may rise 9.5% to 23m tons this year
Indonesia’s palm oil producers expects crude palm oil (CPO) production will increase by 9
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ndonesia’s palm oil producers expects crude palm oil (CPO) production will increase by 9.5 percent to 23 million tons this year from about 21 million tons in 2010.
The forecast, however, is dependent on conducive weather patterns.
“If the weather is normal around harvest time in April or May, the production could increase by two million tons,” Indonesian Palm Oil Producers Association (GAPKI) chairman Fadhil Hasan told The Jakarta Post on Tuesday
If there were excessive rainfall between March and May, Indonesia’s total production might only increase by about 500,000 tons, he cautioned.
According to Fadhil, if CPO production only increased by 500,000 tons this year, or two percent, it would be lower than the average four percent growth recorded in recent years.
In 2010, CPO production rose by 4 percent to 20 million tons, up from 19.2 million tons in 2009.
Indonesia Oil Palm Smallholders Association secretary general Asmar Arsjad warned that this year’s total CPO production could possibly stagnate at 21 million tons, or even decline to only 19 million tons in the event of bad weather.
In addition to the weather factor, the decreasing productivity of older plantations could also result in a decline in the country’s CPO production, he said.
“Of 3.8 million hectares of smallholder plantations, around one million need to be revitalized, and therefore, productivity could decline,” he said.
Indonesia is currently the world’s largest CPO producer. Seventy percent of annual output has been committed to exports. India and China remain the major consumers of Indonesia’s CPO, followed by European countries, Bangladesh and Pakistan.
The Indonesian Palm Oil Board recently estimated that CPO prices would surge this year as global consumption grows faster than total production. “The average CPO price will likely stand between U$870 and $900 per ton this year, an increase from between $840 and $850 last year,” board vice chairman Derom Bangun said Monday, adding, however, that prices might fluctuate throughout the year. (lnd)
