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Indonesia's 2021 crude palm oil exports seen sharply lower - industry body

Indonesia's 2021 crude palm oil exports seen sharply lower - industry body

FILE PHOTO: A palm oil plantation is pictured next to a burnt forest near Banjarmasin in South Kalimantan province, Indonesia, September 29, 2019. REUTERS/Willy Kurniawan/File Photo

SINGAPORE : Indonesia's crude palm oil exports in 2021 are expected to fall 54.4per cent from a year earlier, as top buyer India opts for refined palm products amid high crude prices, a top association official told an industry conference on Monday.

Crude palm oil (CPO) exports from Indonesia are forecast to reach 3.27 million tonnes this year, compared with 7.17 million tonnes in 2020, said Togar Sitanggang, the vice chairman of the Indonesia Palm Oil Association (GAPKI). The industry body had earlier estimated exports of 7.5 million tonnes.

GAPKI cut its forecast as India opted for refined palm products that were more economical compared to CPO, which jumped to record highs throughout the year.

"Because of this, (it) is more economical to import ready-to-use products, rather than making it and processing it in their own plants," said Sitanggang.

This is why total palm oil exports were seen higher, albeit only slightly at 1.2per cent, despite a sharp drop in CPO shipments.

Total palm oil exports in 2021 are expected to rise to 34.42 million tonnes from last year's 34.01 million tonnes, driven by a likely 21.2per cent jump in refined palm exports. Earlier, GAPKI had expected palm oil exports of 37.5 million tonnes.

Palm oil prices have hit record highs multiple times this year due to a supply crunch and as countries recovered from the pandemic.

Adding to CPO costs, top producer Indonesia has raised its CPO export levy to a record high at US$255 per tonne from February to June, although it was reduced in July to US$175.

Indonesian President Joko Widodo said last week the country aims to stop exporting CPO "at some point" in the future. The country has not yet disclosed any details on how it would stop CPO exports.

(Reporting by Fathin Ungku and Bernadette Christina Munthe; Editing by Christopher Cushing and Subhranshu Sahu)

Source: Reuters


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