Indonesia palm oil exports slide by a quarter in February as rival oils become cheaper

Indonesia, the world’s biggest palm oil producer, saw February palm oil exports tumble by a quarter as buyers switched to cheaper rival vegetable oils, the country’s biggest industry group said on Tuesday.

Indonesia shipped 2.17 million metric tons of palm oil products in February, compared to 2.91 million tons in the same month last year, data from the Indonesia Palm Oil Association (GAPKI) showed.

Indonesia’s palm oil faced stiff price competition from other edible oils such as sunflower and rapeseed oils in the first two month of the year, weighing on demand from markets such as top vegetable oils importer India.

“If the other oils are cheaper, automatically they (buyers) will switch to the cheaper products,” GAPKI chairperson Eddy Martono told reporters.

A slowdown in global economic growth also affected demand, while supplies of vegetable oils are ample on higher-than-expected soy oil output, he added.

Domestic consumption of palm oil in February edged higher to 1.86 million tons, versus 1.80 million tons a year earlier, driven by more demand for biodiesel, GAPKI data showed.

Indonesia produced 3.88 million tons of crude palm oil in February. Inventories rose to 3.26 million tons by the end of the month from 3.03 million tons a month earlier.
Source: Reuters (Reporting by Bernadette Christina Munthe, Fransiska Nangoy; Editing by Martin Petty, John Mair and Edwina Gibbs)