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Jakarta Post

'Domino effect' blamed for palm oil output, exports decline: Association

  • Mardika Parama

    Jakarta

Jakarta   /   Sat, August 15 2020   /  01:00 am
Harvest time: A worker gathers oil palm fruit bunches at a plantation in Lampung. Indonesia and Malaysia, the first- and second-largest palm oil producers, have threatened to challenge the European Union via the World Trade Organization if the EU continues to phase out palm oil from transportation fuel.(The Jakarta Post/R. Berto Wedhatama)

Indonesia, the biggest palm oil producer in the world, saw production and exports of the commodity contract in the first half of the year due to economic impacts of the pandemic as well as rolling impacts of drought and a price crash in previous years, the industry association has stated. The Indonesian Oil Palm Association (GAPKI) reported that half-year production of crude palm oil (CPO) and palm kernel oil (PKO) had declined 9.2 percent year-on-year (yoy) to 23.5 million tons. While the COVID-19 health crisis played a role in the decline in palm oil production, said GAPKI chairman Joko Supriyono, the palm oil price crash in 2018 and last year’s prolonged drought due to El Niño had a major effect on overall output. “The main [cause of] the decline in production isn’t really COVID-19, but rather the domi...