Indonesian Palm Oil Exports and Production Grow but El Nino is Looming

Indonesian Palm Oil Production and Export:

	2007	2008	2009	2010	2011	2012	2013¹
Production (million metric tons)	16.8	19.2	19.4	21.8	23.5	26.5	27.5
Export (million metric tons)	n.a	14.2	15.5	15.6	16.5	18.1	20.0
Export (in USD billion)	n.a	15.6	10.0	16.4	20.2	21.6	23.0

^{¹ preliminary result
Sources: Food and Agriculture Organization of the United Nations, Indonesian Palm Oil Producers Association (Gapki) and Indonesian Ministry of Agriculture}

Production of CPO in Indonesia is expected to rise 12 percent to 2.35 million tons in April 2014, while reserves are forecast to fall by 4.8 percent to 2 million tons. Usually, production of CPO in Indonesia increases starting from March (lasting until September) because of the commodity's growing cycle. Meanwhile, Malaysian CPO exports surged 28 percent in the first ten days of May 2014.

However, the El Nino weather phenomenon may curtail Indonesian CPO production in 2015. Australia’s Bureau of Meteorology has previously stated that a new El Nino cycle may start in July 2014. El Niño, which occurs once every five years on average, involves periodical warm ocean water temperatures off the western coast of South America which can cause climatic changes across the Pacific Ocean. Its impact on harvests around the globe varies; sometimes passing almost unnoticeable (for example in 2010), but on other occassions its effects can be felt worldwide. El Nino is expected to bring a dry spell to Southeast Asia, thus impacting on output of CPO and other agricultural commodities. Both the Goldman Sachs Group and Barclays have listed palm oil as crops that can be hurt by the 2014 El Nino cycle.

The Indonesian Palm Oil Association (Gapki) is expected to release April CPO export figures next week.

Listed Indonesian CPO Companies' Financial Results Q1-2014 (in billion rupiah):

	Revenue			Net Profit
Company	Q1-2014	Q1-2013	% Growth	Q1-2014	Q1-2013	% Growth
Astra Agro Lestari	3,725	2,723	36.7	784.6	356.3	120.2
Austindo Nusantara Jaya	398.2	409.2	2.7	44.6	44.2	0.9
Dharma Satya Nusantara	1,238	799.2	54.9	149	21.6	589.8
Gozco Plantations	85.4	68.2	25.2	-8.4	4	-310
Jaya Agra Wattie	214.7	164.9	30.2	30.3	27.6	9.7
PP London Sumatra Indo.	1,279	912	40.2	223.6	100.5	122.4
Provident Agro	244.4	152.5	60.2	85.2	26.4	222.7
Sampoerna Agro	649.6	585.5	10.9	55.4	22.9	141.9
Salim Ivomas Pratama	3,171	3,096	2.4	192	99.8	92.3
SMART	9,072	5,589	62.3	888.2	553.1	60.5
Sawit Sumbermas Sarana	524.2	435.3	20.4	196.1	148.8	31.7
Tunas Baru Lampung	1,158	873	32.6	131.9	77.8	69.5
Bakrie Sumatera Plant.	659.2	481.3	36.9	296.8	-62.9	571.8
Total	22,418	16,289	37.6	3,069	1,420	116.1

^{Source: Investor Daily}

Further Reading:

• Export of Indonesian Crude Palm Oil Rises due to Increased Demand
• Forecasts Suggest that New El Niño Cycle May Be Rather Strong in 2014
• Indonesian Crude Palm Oil Producers Post Good Financial Results in Q1-2014
• Overview of Indonesia's Palm Oil Industry

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