Indonesia’s 2022 palm oil exports seen down 3% y/y – GAPKI
Indonesia’s palm oil exports this year are expected to fall 3% on a yearly basis to 33.21 million tonnes as local demand for the edible oil rises, industry group GAPKI said on Friday, adding that output is seen up by 4.5%.
It was not clear if the forecast took into account the government’s announcement a day earlier of a new measure to limit palm oil exports to try to curtail surging local cooking oil prices.
Shipments from Indonesia, the world’s biggest producer and exporter of palm oil, in 2021 reached 34.23 million tonnes, while output stood at 46.89 million tonnes.
Under the new export rules, palm oil producers must set aside 20% of their planned exports for the domestic market. The rules apply for CPO, olein and used cooking oil.
The market had anticipated 25% production to be set aside for the domestic market, AmInvestment analyst Gan Huey Ling said in a client note on Friday.
“It appears that the allocation for the domestic market would be smaller than expected. Hence, there is more room for exports,” the note said.
Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, said there was about 5.7 million kilolitres of cooking oil available locally.
“This new regulation is to ensure that quantity remains available domestically since the CPO price keeps increasing,” Bagani said.
Indonesia’s move, combined with concern over Malaysia’s production woes, have been the main drivers of the palm oil rally.
Malaysia’s benchmark palm oil contract hit a new record high of 5,525 ringgit per tonne on Friday. [POI/]
Bagani expects the market focus to switch back to Malaysia’s production concern.
In Indonesia, crude palm oil output this year is seen at 49 million tonnes, while palm kernel oil output is forecast to be 4.8 million tonnes, GAPKI said.
“The 2021 palm oil production showed an anomaly,” Mukti Sardjono, GAPKI executive director, said in a statement,
He said output fell in the second half of last year, when production usually picks up, due to scarcity and high prices of fertilisers.
“Therefore, production in the first semester of 2022 will be a guide on whether the drop in production will continue or whether it will reverse,” he said, adding that wet weather in early 2022 will also affect output throughout the year.
Domestic demand for 2022 is expected to reach 20.59 million tonnes this year, up from 18.42 million tonnes last year. Food and biodiesel are the two biggest usages for palm oil at home.
GAPKI data also showed Indonesia’s 2021 ending stock for the vegetable oil was 3.57 million tonnes.
Source: Reuters (Reporting by Fransiska Nangoy; Additional reporting by Bernadette Christina; Writing by Gayatri Suroyo; Editing by Martin Petty)