Indonesian palm oil exports to fall by 2 mln tons

Indonesia’s palm oil exports are expected to fall by 2 million tons this year due to rising domestic consumption and declining production, Oils&Fats International said.

According to Fadhil Hasan, head of trade and promotion at the Indonesian Palm Oil Association, exports from the country could fall to 30.2 million tons in 2024. Hasan said that in the first half of this year, exports have already declined 7.6 percent year-on-year to 15.06 million tons.

He added that oil production is also expected to drop by 1 million tons to 53.8 million tons as last season’s dry weather reduced yields.

“There has been no improvement in productivity or area expansion this year. We expect production to fall by 1 million tons this year,” Hasan said.

Indonesia has increased the country’s palm oil blending mandate to 35% in 2023 and introduced it nationwide from August 1 last year. The move will boost domestic palm oil consumption from 23.2 million tons last year to a record 24.2 million tons in 2024, he said. In August, Indonesia’s energy ministry announced plans to increase the country’s share of biodiesel to 40 percent by January 2025 in an effort to cut fuel imports and reduce emissions.

Increased domestic oil consumption should reduce the surplus for exports, helping Jakarta raise funds for its biodiesel program, Hasan said.

“The government should carefully consider production and export trends before increasing the blending mandate. Exports generate revenue that supports the biodiesel program,” he was quoted as saying.

Earlier, Indonesia cut export duty on palm oil to increase exports of the product, but it did not lead to the expected results. Analysts also predicted that the country could face a 30 percent drop in palm oil exports due to the new EU deforestation law (EUDR).

For almost 30 years of expertise in the agri markets, UkrAgroConsult has accumulated an extensive database, which became the basis of the platform AgriSupp.

It is a multi-functional online platform with market intelligence for grains and oilseeds that enables to get access to daily operational information on the Black Sea & Danube markets, analytical reports, historical data.

You are welcome to get a 7-day free demo access!!!

Tags: Indonesia, palm oil, export