Palm Oil Shipments From Indonesia Dropped By 8.5%
Palm Oil Shipments From Indonesia Dropped By 8.5%
The Indonesia Palm Oil Association (GAPKI) reported on Wednesday that due to a choppy regulatory environment and a production slowdown anticipated to persist this year, Indonesia’s oil exports of palm declined by 8.5% last year.
The largest palm oil producer in the world shipped 30.8 million tonnes of palm oil in 2022, down from 33.7 million tonnes in the previous year.
The government changed its oil export policy in several ways, including by imposing a three-week export restriction in late April to reduce the skyrocketing prices of local cooking oil last year.
According to GAPKI Chairman Joko Priyono, a modest decline in palm oil production last year amid increased domestic use in the energy sector also contributed to the reduced exports. Because fuel usage increased due to the epidemic, he claimed, “biodiesel consumption (last year) rose.”
The feedstock for Indonesia’s 30% required biodiesel blend is oil. In February, the blend will increase to 35% and be referred to as B35.
The country of Southeast Asia produced 46.7 million tonnes of crude palm oil in 2018, a 0.4% decrease from 2021. Additionally, it produced 4.5 million tonnes of palm kernel oil.
According to Joko, the output has stagnated for four years while domestic consumption has increased. Production will remain flat in 2023 as a result of increased fertilizer costs. The lower dosage has been used by farmers, which will impact output this year. By the end of 2022, Indonesia had 3.65 million tonnes of oil reserves.
Palm Oil Is Declining Due To Slow Exports
On Wednesday, the first trading day following the Lunar New Year holidays, Malaysian palm oil futures declined, matching the recent weakness in U.S. soy oil prices on a slowdown in exports. Early trade on the Bursa Malaysia Derivatives Exchange saw the benchmark oil contract for April delivery drop 1.90% to 3,818 ringgit ($894.15) per tonne.
Due to the Lunar New Year holidays, the Malaysian exchange was closed on Monday and Tuesday. According to cargo surveyors, shipments to important markets in India and China caused a 29% to 38% drop in Malaysian oil exports.
Soyoil prices on the Chicago Board of Trade (BOc2) were up 0.26% after Tuesday when they reached their lowest point in more than a month. This week is Lunar New Year’s festival week; hence the Dalian exchange is closed. According to Reuters technical expert Wang Tao, oil from may gradually rise to resistance at 3,980 ringgit per tonne before retesting support at 3,888 ringgit.
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