27/09/2024 (Oils & Fats International) - Palm oil exports from Indonesia are expected to fall by 2M tonnes this year due to increased domestic consumption – following the introduction of a higher biodiesel blending mandate – and reduced output, XM reported from a Reuters article.

Lower output in leading global palm oil producer would limit exports and support benchmark Malaysian prices, an industry official was quoted as saying in the 19 September Reuters report.

The country’s exports could drop to 30.2M tonnes in 2024, Fadhil Hasan, head of the trade and promotion division at the Indonesian Palm Oil Association was quoted as saying on the sidelines of the Globoil conference held in India on 18-20 September.

In the first half of this year, exports fell 7.6% compared to the previous year to 15.06M tonnes, Hasan said.

Production was expected to drop by 1M tonnes to 53.8M tonnes as last year’s dry weather was lowering yields, he added.

“There has been neither an improvement in productivity this year nor an expansion in area. We anticipate that this year will result in a reduction of production by 1M tonnes,” Hasan said.

Indonesia increased the country’s palm oil blending mandate to 35% in 2023 and implemented it nationwide from 1 August last year.

This move would lift domestic palm oil consumption from 23.2M tonnes last year to a record 24.2M tonnes in 2024, he said.

In August, Indonesia’s energy ministry announced plans to raise the country’s biodiesel blending rate to 40% in January 2025, in a bid to reduce fuel imports and lower fossil fuel emissions.

Rising consumption is set to reduce the surplus for exports, which helps Jakarta raise funds to implement its biodiesel programme, according to Hasan.

“The government should carefully consider trends in production and exports before increasing the blending mandate. Exports generate revenue that supports the biodiesel programme,” he was quoted as saying.

https://www.ofimagazine.com/news/indonesian-palm-oil-exports-to-fall-by-2m-tonnes