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Indonesia's July Palm Oil Exports Seen at 4-month Low Due to Holidays, Levy - Reuters Survey
Indonesia's July Palm Oil Exports Seen at 4-month Low Due to Holidays, Levy - Reuters Survey
* Indonesia's CPO output seen 2.856 million tonnes in July
* Output, stocks seen at highest since at least August
* CPO exports seen down 20 percent m/m, lowest since March
21/08/2015 (Reuters) - Indonesia's crude palm oil (CPO) exports likely slumped 20 percent to a four-month low in July due to Ramadan holidays and a new levy on shipments, although output at the top producer continued to climb for a fifth month, a Reuters survey showed.
Worries that exports could weaken further after the holy Muslim month of Ramadan, together with higher output, could dent benchmark palm prices that are heading for an eighth weekly drop - the longest such losing streak since 1999.
Indonesia's CPO exports reached 1.92 million tonnes in July, according to the median estimate of the survey of three Indonesian industry officials and plantation companies, down 20 percent from the forecast for June and the lowest since March.
"The drop in exports was partly due to less working days in the second half of the month for the festival," said Ivy Ng, an analyst at CIMB Investment Bank. People usually take time off to celebrate Eid-al-Fitr at the end of Ramadan, which this year stretched over June-July.
"Maybe some people tried to ship out as much of their product in June, because of concerns that it (levy) could come on July 1 although it eventually came on July 16," Ng added.
Indonesia's new levy requires exporters to pay $50 per tonne for CPO shipments and $30 for shipments of processed palm oil products.
"The CPO levy makes our products less competitive in the global market," said Sahat Sinaga, executive director at the Indonesian Vegetable Oil Industry Association (GIMNI).
"Our markets are taken over by Malaysia."
The survey pegged Indonesia's July production at 2.856 million tonnes, versus 2.8 million tonnes in June.
Indonesian production is likely to rise more in August as plantations are now into their peak harvesting period, while exports are expected to remain weak due to weak global economic sentiment, CIMB's Ng said.
According to the survey, Indonesian palm stocks were at 3.2 million tonnes in July, versus 3.046 million in June. Domestic consumption was estimated at between 550,000 and 800,000 tonnes.
Domestic biodiesel demand was also down due to weak crude prices, analysts said.
The Indonesian Palm Oil Association (GAPKI) publishes monthly data provided by a professional surveyor, which last showed July exports at 2.09 million tonnes.
The Reuters survey includes contributions from GAPKI, GIMNI and PT Sinar Mas Agro Resources & Technology, one of the largest listed palm companies.
Below is a table of median Reuters CPO survey results and GAPKI palm & lauric oils export data for 2014/15 (forecasts in million tonnes).
Month Output Exports Inventories GAPKI export data
July 2.856 1.920 3.200 2.09
June 2.800 2.400 3.046 2.27
May 2.774 2.150 2.540 2.22
April 2.662 2.046 2.602 2.25
March 2.397 1.800 2.667 2.03
February 2.049 1.750 2.425 1.79
January 2.056 1.658 2.413 1.81
----------------------------------------------------
December 2.165 1.837 2.325 1.97
November 2.306 2.100 2.225 2.26
October 2.385 1.820 2.378 2.47
September 2.675 1.750 2.500 1.70
August 2.750 1.720 2.575 1.72
* Output, stocks seen at highest since at least August
* CPO exports seen down 20 percent m/m, lowest since March
21/08/2015 (Reuters) - Indonesia's crude palm oil (CPO) exports likely slumped 20 percent to a four-month low in July due to Ramadan holidays and a new levy on shipments, although output at the top producer continued to climb for a fifth month, a Reuters survey showed.
Worries that exports could weaken further after the holy Muslim month of Ramadan, together with higher output, could dent benchmark palm prices that are heading for an eighth weekly drop - the longest such losing streak since 1999.
Indonesia's CPO exports reached 1.92 million tonnes in July, according to the median estimate of the survey of three Indonesian industry officials and plantation companies, down 20 percent from the forecast for June and the lowest since March.
"The drop in exports was partly due to less working days in the second half of the month for the festival," said Ivy Ng, an analyst at CIMB Investment Bank. People usually take time off to celebrate Eid-al-Fitr at the end of Ramadan, which this year stretched over June-July.
"Maybe some people tried to ship out as much of their product in June, because of concerns that it (levy) could come on July 1 although it eventually came on July 16," Ng added.
Indonesia's new levy requires exporters to pay $50 per tonne for CPO shipments and $30 for shipments of processed palm oil products.
"The CPO levy makes our products less competitive in the global market," said Sahat Sinaga, executive director at the Indonesian Vegetable Oil Industry Association (GIMNI).
"Our markets are taken over by Malaysia."
The survey pegged Indonesia's July production at 2.856 million tonnes, versus 2.8 million tonnes in June.
Indonesian production is likely to rise more in August as plantations are now into their peak harvesting period, while exports are expected to remain weak due to weak global economic sentiment, CIMB's Ng said.
According to the survey, Indonesian palm stocks were at 3.2 million tonnes in July, versus 3.046 million in June. Domestic consumption was estimated at between 550,000 and 800,000 tonnes.
Domestic biodiesel demand was also down due to weak crude prices, analysts said.
The Indonesian Palm Oil Association (GAPKI) publishes monthly data provided by a professional surveyor, which last showed July exports at 2.09 million tonnes.
The Reuters survey includes contributions from GAPKI, GIMNI and PT Sinar Mas Agro Resources & Technology, one of the largest listed palm companies.
Below is a table of median Reuters CPO survey results and GAPKI palm & lauric oils export data for 2014/15 (forecasts in million tonnes).
Month Output Exports Inventories GAPKI export data
July 2.856 1.920 3.200 2.09
June 2.800 2.400 3.046 2.27
May 2.774 2.150 2.540 2.22
April 2.662 2.046 2.602 2.25
March 2.397 1.800 2.667 2.03
February 2.049 1.750 2.425 1.79
January 2.056 1.658 2.413 1.81
----------------------------------------------------
December 2.165 1.837 2.325 1.97
November 2.306 2.100 2.225 2.26
October 2.385 1.820 2.378 2.47
September 2.675 1.750 2.500 1.70
August 2.750 1.720 2.575 1.72