Indonesian palm oil exports expected to fall in 2022, says industry source

Indonesia’s palm oil exports are expected to jump in the second half of the year after the elimination of duties for foreign sales, but the 2022 total will still be lower than 2021’s 33.7 million tonnes due to earlier restrictions, a spokesperson said. industry official to Reuters.

Lower shipments for the year could lift inventories at the world’s biggest palm oil producer to about 5 million tonnes by the end of the period, from 4.1 million tonnes a year earlier, said Fadhil Hasan, head of the trade division. and promotion of the Indonesian Palm Oil Association (GAPKI).

“Exports would be higher in the second half of the year, but they cannot compensate for the drop in exports in the first half of the year,” added Hasan, during the break at the Globoil conference in Agra, India.

Indonesia imposed restrictions on palm oil exports in the first half of 2022 to calm record prices and bring relief to consumers.

But the restrictions pushed grower stocks to record levels and some growers were forced to stop buying bunches of fresh fruit from farmers.

Indonesian producers are now moving to decrease their inventories after Jakarta recently extended its export tax exemption to October 31, in a change of course from the May export ban, which excluded them from global trade.

The government should waive the tax on palm oil exports by December 2022 to further reduce inventories, Hasan said.

Indonesia could produce 45 million tonnes of crude palm oil in 2022, down from 46.9 million tonnes last year, he said. Indonesia was previously expected to produce 48 million tonnes.

“The expansion of the area is limited and productivity is falling. We are replanting. The production trend is downward. In 2023 production could be less than 2022,” Hasan said.