10/12/2008 (Bloomberg) - Indonesia’s exports of crude palm oil and other products from oil palm plantations may drop 31 percent in the last quarter of this year as lower prices force buyers to default on purchase orders.

Exports of products derived from palm fruits and kernels may fall to 2.66 million metric tons in the three months to Dec. 31, from 3.86 million tons in the same period last year, according to estimates given today by Sahat Sinaga, executive director at the Indonesian Confederation of Vegetable Industries, or Gimni.

Indonesia in October scrapped a levy on palm oil exports as local currencies and commodity prices plunged. Palm oil futures in Malaysia have lost 25 percent since Oct. 1 after declining 42 percent in the July-September period, the biggest quarterly drop since 1995, as supply outstrips demand.

“Many buyers who entered into contracts in August-September for delivery this quarter have defaulted,” Sinaga said today in a phone interview. Overseas buyers canceled or defaulted on at least 200,000 tons of orders, he said.

Indonesia, the world’s biggest palm oil producer, shipped 10.91 million tons of palm products in the nine months through September, from 9.33 million tons a year earlier, the data showed.

The following table shows export volume for oil palm products, in metric tons.

                     Jan.-September       October-December
Type of oils         2008      2007        2008(Est)   2007
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Fruit-derived
 Crude palm oil     5,226,060  4,143,511  1,242,345  1,834,299
 RBD Palm olein     2,563,176  2,332,111    543,782    872,993
 Bio diesel           385,055    161,333    118,743     89,717
 Palm derivatives   1,772,790  1,688,558    435,766    701,818
Kernel-derived
 Crude lauric         743,038    777,238    232,400    279,650
 Kernel derivatives   215,204    226,880     85,430     82,528
---------------------------------------------------------------
Total              10,905,323  9,329,631  2,658,466  3,861,005
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Note: Palm derivatives export figures show total shipments for palm fatty acid distillate and refined, bleached and deodorized palm oil and palm stearin. Crude lauric refers to crude palm kernel oil, while kernel derivatives export figures show total shipments of palm kernel stearin, palm kernel olein and other derivatives. Figures for October through December of 2008 are estimates.