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View all search resultsPalm oil sector relies on domestic demand as exports drop
The commodity’s exports will drop 18 percent yoy to 24.92 million tons this year, mainly as the European Union, China and India shudder from the ongoing coronavirus pandemic, according to Gapki data.
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rowth in demand for Indonesian palm oil this year will be driven by domestic consumption as exports drop amid the COVID-19 pandemic, according to the Indonesian Palm Oil Association (Gapki).
Indonesia, the world’s top palm oil producer, is expected to raise domestic consumption by a slight 1.2 percent year-on-year (yoy) to 15.8 million tons in 2020, Gapki data unveiled on Sept. 1 show.
The growth will be entirely driven by the government’s 30 percent palm oil-mixed biodiesel (B30) program, which is expected to offset lower domestic demand for palm-oil based groceries, similar data reveal.
“We absolutely cannot export biodiesel this year,” said Gapki secretary-general Togar Sitanggang at a discussion hosted by MarkPlus on Sept 1.
Palm oil, which is Indonesia’s second biggest export behind coal, is regularly touted as a solution to the country’s gaping trade deficit, yet Gapki’s data show the palm oil industry is bracing for an about turn in terms of export volume this year.
The commodity’s exports will drop 18 percent yoy to 24.92 million tons this year, mainly as the European Union, China and India shudder from the ongoing coronavirus pandemic, according to Gapki data. The three key markets account for half of the country’s total exports.
Togar explained that, apart from the B30 program, low crude oil prices worldwide had made biodiesel uncompetitive with its fossil fuel counterpart.
