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Jakarta Post

Analysis: Recovery of CPO demand

  • Andrian Bagus Santoso

    Jakarta

Jakarta   /   Wed, September 16 2020   /  01:00 am
Workers harvest oil palm fruit at PT Kimia Tirta Utama’s oil palm plantation in Siak regency, Riau, on Thursday. The price of crude palm oil has decreased 17 percent since late last year, owing to the growing anti-palm oil campaign in Europe. The price of CPO for August delivery rose 0.9 percent to US$1,985 per ton at the Malaysia Derivatives Exchange on Thursday.(Antara/FB Anggoro)

The COVID-19 pandemic has hit global demand for most products, including crude palm oil (CPO). The United States Department of Agriculture (USDA) in its oilseed report predicts that global consumption of CPO will decline by 2.3 percent year-on-year (yoy) in the September 2019 to October 2020 period. The USDA also predicts that CPO consumption will recover in the next period by 4.2 percent yoy. In a more detailed view, CPO demand actually began to normalize since June 2020. One of the indicators that show improved demand is export volume from major producing countries, such as Indonesia and Malaysia. Indonesia's CPO export volume in June and July 2020 were 2.1 and 2.4 million tons respectively, the same volume as Indonesia’s CPO exports in June and July 2019. Similarly, Malaysia’s CPO export volume in June and July were recorded at 1.7 and 1.8 million tons, respectiv...