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CPO output decline to continue in 2022: Gapki
The decline in national palm oil production is expected to continue in 2022, primarily as a result of the global shortage in shipping containers and its impact on fertilizer distribution.
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A worker secures palm fruit bunches to a truck bed on Aug. 16, 2019 at a plantation in Nagan Raya, Aceh. (AFP/Chaideer Mahyuddin)
T
he Indonesian Palm Oil Association (Gapki) expects the declining output trend to continue into the coming year, mainly due to disruptions in the global fertilizer supply chain.
Gapki secretary-general Eddy Martono told reporters on Wednesday that the global shortage of shipping containers had greatly affected the distribution of chemical fertilizers, particularly potassium and phosphate, which the country imported for use in oil palm cultivation.
He added that the market condition had been exacerbated by a spike in fertilizer prices as a result of the supply disruption.
“There is disruption in the fertilizer supply. If it interferes with fertilization [at plantations], production could decline next year. If production declines while demand remains high, it could affect the price,” Eddy said at a Gapki press conference on Nov. 17.
Read also: Jokowi floats CPO export ban. Infeasible, experts say
Mona Surya, the chair of the organizing committee of the Indonesian Palm Oil Conference (IPOC) 2021 and 2022 Price Outlook, said at the same event that weather could also hamper palm oil production in the first half of 2022, though she expressed her hope that palm oil prices would remain high.
Palm oil is Indonesia’s second largest export commodity, ranking just after coal, with exports exceeding US$2.81 billion (Rp 39.84 trillion) over the first 10 months of this year.
