28/04/2016 (Tempo.co) - Indonesia’s palm oil exports in March dropped by 24 percent compared to February without causing panic among palm oil producers.“[The export volume] was intentionally reduced to meet domestic demands for biodiesel production,” Fadhil Hasan, chairman of the Indonesian Oil Palm Producers Association, said in a press release on Wednesday, April 27, 2016.

In addition, the oil palm industry was forced to maintain domestic supplies since the oil palm production was affected by last year’s El Nino.

Data from Gapki revealed that the biodiesel absorption in the first quarter of 2016 reached 732,000 kiloliters.

“With a consistent absorption trend, Gapki is optimistic that the target of 3 million kiloliters absorption in 2016 can be achieved,” Fadhil said.

Indonesia also recorded a drop in palm oil production in March by 6.4 percent to 2.31 million tons from February’s 2.47 million tons. The decreasing trend has started since early this year due to last year’s El Nino.Indonesia’s palm oil supplies, including biodiesel and oleochemical, in March stood at 3.02 million tons, decreasing by 12 percent compared to February’s 3.44 million tons.Indonesia’s palm oil exports in 2016 stood at 1.74 million tons, falling by 24 percent compared to February’s 2.29 million tons. The palm oil exports volume increased by 9 percent to 6.14 million tons from 5.6 million tons in the same period last year