BUSINESS
JAKARTA (FORESTHINTS.NEWS) - Despite the impact of the global pandemic, the value of Indonesia’s palm oil exports last year amounted to USD22.97 billion, up USD2.75 billion, or 13.6%, from the 2019 figure of USD20.22 billion.
While there was a dip in the volume of Indonesian palm oil exports in 2020 of around 9%, from 37.39 million tons in 2019 to 34 million tons, this was offset by a rise in the value of these exports during the pandemic year, driven by a rise in the price of CPO from an average of USD646/ton in the first half of 2020 to USD775/ton in the second half.
The increase in the price of CPO is partly attributable to President Joko Widodo's move to reaffirm Indonesia's commitment to absorbing CPO production so as to keep pushing up the level of the government’s mandatory targets on biodiesel for domestic consumption.
These were among the issues highlighted in a press release (Feb 4) to convey the substance of “Reflections of the Palm Oil Industry in 2020 and Outlook for 2021" from the Indonesian Palm Oil Association (GAPKI).
The palm oil association pointed out that the increased value of palm oil exports in 2020, totaling close to USD23 billion, meant that these exports played a hugely significant role in keeping Indonesia's balance of trade positive.
The chart below shows the value of Indonesia's palm oil exports from January to December 2019 and 2020, indicating a fairly substantial increase last year on the back of higher CPO prices and despite the fall in export volume in 2020.
Absorption level
The data from the palm oil association also show that during the pandemic year of 2020, total production of palm oil in Indonesia reached 51.58 million tons, of which more than 91% was CPO.
However, with the addition of 4.6 million tons of opening stock in early 2020, leftover from 2019, the country’s total palm oil supply actually exceeded 56.22 million tons for 2020.
Of this total palm oil supply, 51.36 million tons, or 91.34%, was absorbed by the export and domestic markets, as seen in the following chart.
In other words, 8.66% of Indonesia's total palm oil supply, over 4.86 million tons, was not absorbed and will thus serve as opening stock for early 2021.
From Indonesia's total supply of palm oil in 2020, besides the more than 60.48% for export, 30.86% (17.35 million tons) was consumed for domestic needs. It was used for food and industrial production, including biodiesel, with a composition of 48.58% for food and 51.42% for industry.
Demand for biodiesel
The data published by the palm oil association also indicated a rise in the consumption of CPO, from 5.83 million tons in 2019 to 7.23 million tons in 2020, a leap of nearly 24% to meet the government's biodiesel target for domestic use.
In contrast, there was a dramatic slump of more than 97% in demand for CPO for biodiesel for export purposes - from 1.12 million tons in 2019 to 31 thousand tons in 2020.
Nonetheless, this sharp fall in demand for CPO for biodiesel for export markets was counterbalanced by the rise in CPO consumption for domestic biodiesel production, as depicted in the following chart.
Projections for 2021
Overall, there was in fact only a very slight drop of 0.3% in the level of CPO production in 2020 from 2019, with production standing at over 47 million tons per year in both years.
As such, Indonesia’s CPO production was essentially not disrupted at all in spite of all the challenges posed by the global pandemic in 2020.
In 2021, the palm oil association is targeting total CPO production to reach 49 million tons, up 4.18% compared to 2020.
Furthermore, CPO absorption is projected to reach 8 million tons for 2021 - an increase of 10.77% from 2020’s amount of 7.23 million tons - to meet the government's mandatory target for domestic biodiesel.
The Indonesian Palm Oil Association also expects Indonesia's palm oil exports, which are dominated by CPO/processed CPO, to go up in 2021, in terms of both volume and value.
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BUSINESS
JAKARTA (FORESTHINTS.NEWS) - Despite the impact of the global pandemic, the value of Indonesia’s palm oil exports last year amounted to USD22.97 billion, up USD2.75 billion, or 13.6%, from the 2019 figure of USD20.22 billion.
While there was a dip in the volume of Indonesian palm oil exports in 2020 of around 9%, from 37.39 million tons in 2019 to 34 million tons, this was offset by a rise in the value of these exports during the pandemic year, driven by a rise in the price of CPO from an average of USD646/ton in the first half of 2020 to USD775/ton in the second half.
The increase in the price of CPO is partly attributable to President Joko Widodo's move to reaffirm Indonesia's commitment to absorbing CPO production so as to keep pushing up the level of the government’s mandatory targets on biodiesel for domestic consumption.
These were among the issues highlighted in a press release (Feb 4) to convey the substance of “Reflections of the Palm Oil Industry in 2020 and Outlook for 2021" from the Indonesian Palm Oil Association (GAPKI).
The palm oil association pointed out that the increased value of palm oil exports in 2020, totaling close to USD23 billion, meant that these exports played a hugely significant role in keeping Indonesia's balance of trade positive.
The chart below shows the value of Indonesia's palm oil exports from January to December 2019 and 2020, indicating a fairly substantial increase last year on the back of higher CPO prices and despite the fall in export volume in 2020.
Absorption level
The data from the palm oil association also show that during the pandemic year of 2020, total production of palm oil in Indonesia reached 51.58 million tons, of which more than 91% was CPO.
However, with the addition of 4.6 million tons of opening stock in early 2020, leftover from 2019, the country’s total palm oil supply actually exceeded 56.22 million tons for 2020.
Of this total palm oil supply, 51.36 million tons, or 91.34%, was absorbed by the export and domestic markets, as seen in the following chart.
In other words, 8.66% of Indonesia's total palm oil supply, over 4.86 million tons, was not absorbed and will thus serve as opening stock for early 2021.
From Indonesia's total supply of palm oil in 2020, besides the more than 60.48% for export, 30.86% (17.35 million tons) was consumed for domestic needs. It was used for food and industrial production, including biodiesel, with a composition of 48.58% for food and 51.42% for industry.
Demand for biodiesel
The data published by the palm oil association also indicated a rise in the consumption of CPO, from 5.83 million tons in 2019 to 7.23 million tons in 2020, a leap of nearly 24% to meet the government's biodiesel target for domestic use.
In contrast, there was a dramatic slump of more than 97% in demand for CPO for biodiesel for export purposes - from 1.12 million tons in 2019 to 31 thousand tons in 2020.
Nonetheless, this sharp fall in demand for CPO for biodiesel for export markets was counterbalanced by the rise in CPO consumption for domestic biodiesel production, as depicted in the following chart.
Projections for 2021
Overall, there was in fact only a very slight drop of 0.3% in the level of CPO production in 2020 from 2019, with production standing at over 47 million tons per year in both years.
As such, Indonesia’s CPO production was essentially not disrupted at all in spite of all the challenges posed by the global pandemic in 2020.
In 2021, the palm oil association is targeting total CPO production to reach 49 million tons, up 4.18% compared to 2020.
Furthermore, CPO absorption is projected to reach 8 million tons for 2021 - an increase of 10.77% from 2020’s amount of 7.23 million tons - to meet the government's mandatory target for domestic biodiesel.
The Indonesian Palm Oil Association also expects Indonesia's palm oil exports, which are dominated by CPO/processed CPO, to go up in 2021, in terms of both volume and value.
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