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Indonesian CPO exports regain momentum amid excessive domestic stockpiles
Indonesia’s shipments of crude palm oil (CPO) and its derivative products have begun to soar again following the halting of an export ban in May, yet the problem of excessive domestic stockpiles, which has led to a drop in CPO prices, still cannot be solved.
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Workers transfer harvested palm fruits to a truck before being processing into crude palm oil (CPO) at a palm plantation in Pekanbaru, Riau, on April 23. (AFP/Wahyudi)
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ndonesia’s shipments of crude palm oil (CPO) and its derivative products have begun to soar again following the halting of an export ban in May, yet the problem of excessive domestic stockpiles, which has led to a drop in CPO prices, still cannot be solved.
According to Indonesian Palm Oil Business Association (GAPKI) data, CPO exports in June reached 2.33 million tonnes, 3.4 times higher than the previous month, following the stopping of the export ban on May 23.
GAPKI executive director Mukti Sardjono elaborated that the biggest jump in CPO demand by the end of the first half of this year came from Pakistan, followed by the European Union, China, India and the African region.
“CPO exports to Pakistan hit 295,000 tonnes in June up from the previous month’s 281,000 tonnes. Demands from the EU also rose from 177,800 to 296,700 tonnes, China from 208,500 to 416,200 tonnes, India from 154,500 to 212,300 tonnes and Africa 156,600 tonnes to 199,400 tonnes,” he said on Thursday.
In the domestic market, meanwhile, CPO consumption increased by 225,000 tonnes month-to-month (mtm) to 1.83 million tonnes in June.
Mukti said the biggest increase in domestic demand for CPO occurred for biodiesel, which rose from 130,000 tonnes in May to 720,000 tonnes the following month, and for food, rising by 97,000 tonnes to reach 934,000 tonnes in the same time period.
“We also saw CPO production in June increased by about 6 percent mtm to 3.29 million tonnes, while that of palm kernel oil [PKO] rose to 322,000 tonnes. The increase in CPO production is in line with the actual fresh fruit bunches [FFB] production in the plantations, but the FFB processed at the palm oil mills [POM] has not yet reached 100 percent due to the high occupancy of the POM tanks,” Mukti said.
