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Indonesia signals optimism for CPO rebound in 2021 as price, demand pick up
The government is optimistic.about the prospects for crude palm oil in 2021 amid signs of recovery in the global price and domestic demand for the the commodity.
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A road bisects an oil palm plantation in Bulutumbang, Belitung, as seen in this file photo taken on Aug. 27, 2020. (JP/Donny Fernando)
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ndonesia, the world’s top palm oil producer, is expecting the price of crude palm oil (CPO) to rebound next year as economic activities start to pick up and demand recovers from the pressures of the COVID-19 pandemic.
Coordinating Economic Minister Airlangga Hartarto said the government was upbeat about the prospects of the commodity’s recovery in 2021, with a slight rise of 2.7 percent in the CPO price to US$668 per metric ton from an estimated $650 this year.
“In 2021, the demand for palm oil is expected to recover as economies reopen and palm oil prices are also propped up by the biodiesel policy and increasing demand from major partners,” Airlangga said at a virtual discussion on Wednesday.
The optimistic 2021 outlook for Indonesia’s second biggest export after coal comes as the palm oil market has started showing signs of recovery from the pandemic-induced slump in both consumption and demand.
According to the global benchmark Bursa Malaysia Derivatives, the global CPO price rallied on Wednesday to 3,476 ringgit ($853.5) per metric ton after reaching its lowest point this year of 2,000 ringgit per metric ton on May 6.
The Indonesian Palm Oil Association (Gapki) stated earlier that domestic consumption would drive this year’s demand growth for Indonesian palm oil as exports dropped during the COVID-19 pandemic, with domestic demand propelled mainly by the government’s B30 program of 30 percent palm oil-blended biodiesel.
