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Supply growing, exports remain low
Published on: Saturday, June 25, 2022
By: Tempo
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A worker fills jerrycans with cooking oil at a distribution station in Jakarta. (Reuters)
JAKARTA: The Indonesian Palm Oil Producers Association (GAPKI) this week said Indonesia’s palm oil product exports in April this year were lower than the same month in 2021 with 2,018 tons from 2,636 tons. He explained that this is mainly because the government introduced a policy intended to increase the domestic supply of cooking oil. 

“The low exports are caused by the government adding the supply of domestic cooking oil because up until April the price of that commodity has not reached the levels that are expected,” GAPKI executive director Mukti Sardjono wrote in a statement.

He also mentioned the prices of Cif Rotterdam’s crude palm oil (CPO) in April were US$ 1,719, down from US$ 1,813 in March. In line with prices, the value of exports fell from US$ 3,513 million in March to US$ 3,435 million in April.

According to Mukti, the drop in exports occurred for destinations to Pakistan, the United States, China, and India, while exports to the Netherlands, Russia, and Bangladesh rose. Domestic consumption showed an increase from 1,507,000 tons in March to 1,751,000 tons in April.

Mukti said the largest increase occurred in the food industry, from 635,000 tons in March to 812,000 tons in April, biodiesel products also rose from 1,507,000 tons in March to 1,751,000 tons in April. In terms of production, he said that there was an increase in CPO production by 100 thousand tons from 3,782,000 tons in March to 3,882,000 tons in April.

With relatively favourable weather and high prices, Mukti went on, the momentum for increasing production must be maintained to achieve optimum revenue. However, the increase in stock needs to be watched out for to prevent the tank from filling up due to the export ban as he believes when it is full, the palm oil mill (PKS) will stop operating and will result in no purchase of FFB (palm oil fresh fruit bunches) from farmers.

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