Indonesia’s May palm oil exports soar 53% as discounts drive demand

Indonesia’s crude and refined palm oil exports soared 53% in May from a year ago, data from the statistics bureau showed, as the tropical oil started trading at a discount to its rivals, boosting demand from key buyers.

The surge in exports from Indonesia, the world’s top palm oil producer, is expected to trim inventories and support prices, which have slipped to a discount against soyoil, after commanding a premium earlier this year.

According to data, Indonesia exported 1.88 million metric tonnes of crude and refined palm oil in May, up from year-ago 1.23 million tonnes.

In value terms, exports surged nearly 71% year-on-year to US$1.85 billion (RM7.76 billion), the data showed.

Between January and May, Indonesia exported 8.3 million metric tonnes of crude and refined palm oil, up from 8.01 million tonnes a year ago, the data further showed.

However, the bureau’s data excludes palm kernel oil, oleochemicals and biodiesel.

Indonesia’s palm oil association GAPKI usually releases its data at a later date, covering more products and with different export figures.

The export surge in May was due to strong demand from India and the subcontinent, as palm oil prices were at a steep discount compared to soyoil and sunflower oil, said Anilkumar Bagani, research head of Mumbai-based vegetable oil broker Sunvin Group.

“Even in June, exports were robust, as palm oil prices were very competitive,” Bagani said.

Palm oil mainly competes with soyoil and sunflower oil supplies from Argentina, Brazil, Russia and Ukraine.

Indonesia has entered its peak production season and the pickup in exports would help reduce stocks in the country, said a New Delhi-based dealer with a global trade house.

Palm oil stocks in Indonesia surged 50% month-on-month to 3.04 million metric tonnes by the end of April — the highest since May 2024, driven by a decline in exports, data from GAPKI showed last week.