09.02.2022 (www.argusmedia.com) - Indonesian crude palm oil (CPO) production is expected to rise by more than 2mn t from 2021 to 49mn t this year, according the national palm oil association Gapki, its most prolific output since at least 2017.
But headwinds remain for farmers as the high cost of fertilizer inhibited its use last year while extreme wet weather in the first half of this year could still inhibit output.
Palm kernel oil production is projected to rise by 400,000t to 4.8mn t giving total palm output of 53.8mn t for 2022.
CPO production dipped to 46.89mn t in 2021 from 47.03mn t in 2020 as limited fertilizer usage, adverse weather and labour shortages outweighed any demand recovery from the first year of Covid-19.
Demand will be largely determined by the pace of recovery from Covid-19 but total domestic consumption is estimated at 20.59mn t this year from 18.42mn t in 2021.
Of this total around 9.6mn t will be for food consumption, 8.83mn t for biodiesel and 2.16mn t for oleochemcials. This will result in around 33.21mn t for export, down from 34.23mn t last year.
Local consumption rose by 6pc to 18.42mn t in 2021 mainly driven by a 25pc increase in oleochemicals demand to 2.13mn t and a 6pc upswing in food usage to 8.95mn t. Biodiesel consumption rose by just 2pc to 7.34mn t as the country's blend mandate remained at 30pc though transport fuel use picked up.
But the high blend mandate and lackluster production froze palm exports at 34.2mn t. While this was only 200,000t higher than in 2020, supply shortages drove up the average price to $1,194/t from $715/t and facilitated a 52pc gain in total export value to $35bn.
By Amandeep Parmar
Indonesia palm oil industry statistics 000t
2022 forecast 2021 % change
Production
CPO 49,000 46,888 4.5
CPKE 4,800 4,412 8.8
Total 53,800 51,300 4.9
Domestic Consumption
Food 9,600 8,954 7.2
Oleochemicals 2,160 2,126 1.6
Biodiesel 8,830 7,342 20.3
Total 20,590 18,422 11.8
Export
Total 33,210 34,234 -3.0
Source: Gapki
