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Palm oil output to rise 4.5 percent this year as demand recovers: Association
GAPKI expects prices to be strong this year, averaging between $850 and $900 per metric ton of crude palm oil.
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Palm oil companies in Indonesia, the world’s top producer of the commodity, expect output to rise 4.5 percent year-on-year (yoy) to 53.9 million tons in 2021, a reversal of last year’s contraction driven by recovering global demand. (Shutterstock/mrfiza)
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alm oil companies in Indonesia, the world’s top producer of the commodity, expect output to rise 4.5 percent year-on-year (yoy) to 53.9 million tons in 2021, a reversal of last year’s contraction driven by recovering global demand.
Indonesian Palm Oil Producers Association (GAPKI) chairman Joko Supriyono said on Feb. 4 that this year’s demand would be driven by both domestic and foreign markets, supported by Indonesia’s 30 percent palm oil-mixed biodiesel (B30) program and by economies recovering from the COVID-19 outbreak. In 2020, palm oil production fell by 1.05 percent yoy to 51.63 million tons.
“Production in 2021 will rise but not by much. Export volumes will depend on whether the COVID-19 vaccine can cover most of the world,” said Joko during a virtual media briefing.
GAPKI data shows that export volumes are expected to rise 10.3 percent yoy to 37.5 million tons while domestic consumption increases by 6.7 percent yoy to 18.5 million tons this year. The figures are higher than in 2019, before the pandemic.
Palm oil is a key driver of both economic activity and deforestation in Indonesia. The industry employs millions of Indonesians, and the commodity was one of the country’s top exports in December 2020 at US$2.62 billion, according to Statistics Indonesia (BPS).
Last year, the association noted that demand for palm oil had relied on growth in domestic consumption as exports had fallen.
