Indonesia's Production of Palm Oil Grows 25.6% in First Half of 2013
Indonesia's production of crude palm oil (CPO) in the first six months of 2013 rose 25.64 percent compared to semester I-2012 to 14.7 million tons, which is a little over half of this year's CPO production target. Despite weak global demand for the commodity (accompanied by falling CPO prices), growth was accomplished due to new seeds that became productive and because the total size of Indonesian palm oil estates continues to expand. Productive estates now stand at 9.4 million hectares from 8.7 million hectares last year.
Of the total CPO production in Semester I-2013, four million tons have been consumed domestically for the production of food, oleo-chemicals and biodiesel. The domestic food industry is the biggest consumer of Indonesian CPO with 2.9 million tons, followed by oleo-chemicals (600 thousand tons) and biodiesel (480 thousand tons).
Total domestic consumption of Indonesia's CPO production in 2013 is expected to reach 7.8 million tons, while total production is assumed to rise to 29.4 million tons this year.
Global palm oil production is dominated by Indonesia and Malaysia. These two countries together account for around 85 to 90 percent of total global palm oil production. Currently, Indonesia is the largest producer and exporter of palm oil worldwide. However, Indonesia has often been criticized by environmentalist groups for giving too much room for palm oil plantation development (resulting in forest fires, deforestation and destruction of carbon-rich peat lands).
Indonesia's Palm Oil Production and Export
| 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013¹ | |
| Production (million metric tonnes) |
16.8 | 19.2 | 19.4 | 21.8 | 23.5 | 26.5 | 29.4 |
| Export (million metric tonnes) |
n.a | 14.2 | 15.5 | 15.6 | 16.5 | 18.1 | 21.0 |
| Export (in USD$ billion) |
n.a | 15.6 | 10.0 | 16.4 | 20.2 | 21.6 | - |
¹ indicates forecast
Sources: Food and Agriculture Organization of the United Nations, Indonesian Palm Oil Producers Association (Gapki) and Indonesian Ministry of Agriculture
Biodiesel
Indonesian exports of biodiesel have weakened in 2013. Initially, the Association of Indonesian Biodiesel Producers (Aprobi) expected to export 1.5 million tons of biodiesel. However, the figure will most likely fall below the 1 million tons. This weak performance is related to the European Union’s decision to impose temporary anti-dumping duties on Indonesia’s biodiesel, which became effective in late May 2013. Domestic producers claim, however, that their biodiesel products can be sold at cheap prices as production costs are lower in Indonesia.
The European Union's stance has far reaching consequences for Indonesian-produced biodiesel as the Eurozone accounts for 96 percent of Indonesia's biodiesel export market.
Indonesia, which supplies about nine percent of the world's total amount of biodiesel, will have a biodiesel production capacity of about 3.6 million tons this year, according to the Indonesian Vegetable Oil Refiners Association (GIMNI).
Bahas
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