Exports of Indonesian crude palm oil (CPO) and its derivatives may increase to 21.6 million tons (collecting about USD $16.0 - 17.3 billion in foreign exchange) in 2015. Meanwhile, Indonesian CPO production is estimated to reach 32.5 million tons next year while the CPO price is estimated to range between USD $740 - 800 per ton. However, provided that the Indonesian government will extend its current zero export tariff scheme for CPO exports, then the country’s CPO exports are expected to accelerate.

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On 30 November 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic matters such as the country’s revised inflation outlook, participation in the Asian Infrastructure Investment Bank, updates on palm oil and coal, car sales, Jokowi’s development targets, and more.

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Exports of Indonesian crude palm oil (CPO) and its derivatives increased 45.8 percent month-on-month (m/m) to 2.47 million metric tons in October 2014 primarily supported by the zero export tariff that was implemented by the Indonesian government per 1 October. Indonesia has a mechanism that when the average CPO price (which is calculated using international and local CPO prices) drop below USD $750 per metric ton, the export tax is scrapped. In early September, Malaysia had already implemented a zero CPO export tax.

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Forecasts for crude palm oil (CPO) futures in 2015 are positive as prices are expected to rise on declining inventories in Malaysia, growing Indian CPO imports, and falling Indonesian CPO exports as domestic biodiesel demand rises in Southeast Asia’s largest economy. Malaysian palm oil futures rose to a four-month high at the start of the week (touching 2,345 ringgit per metric ton) partly due to sharp ringgit depreciation (which makes CPO relatively cheap for other currency-holders). However, today (06/11) futures fell 1.3 percent to 2,223 ringgit.

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Indonesian crude palm oil (CPO) producers have released good corporate earnings over the first nine months of 2014. Below, we have presented an overview of those CPO producers, listed on the Indonesia Stock Exchange, that have already released their financial results. Combined, these eleven companies recorded net profit growth of 155.3 percent year-on-year (y/y). The main reason for this improved performance was the 24 percent (average) increase in global CPO prices as the commodity gained popularity as an energy source.

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On 26 October 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic and political topics such as last week's inauguration of Indonesia’s seventh President, economic growth, the impact of slowing GDP growth in China, a palm oil update, new rules in the tobacco industry, and more.

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With China’s economic growth slowing to 7.3 percent year-on-year (y/y) in the third quarter of 2014, Indonesian exports will be affected as China is one of Indonesia’s most important trading partners. Prior to the release of China’s Q3-2014 GDP growth result, the outgoing government of Indonesia had already trimmed its export target for 2014 as global commodity prices have still not picked up. In fact prices of palm oil, coal, rubber, copper and iron ore have fallen in the first three quarters of 2014 according to Indonesian government data.

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Exports of crude palm oil (CPO) and CPO derived products from Indonesia in the first nine months of 2014 only reached 15 million tons, down 1.75 percent from the same period last year. The main cause for this disappointing performance is slowing economic growth in China and India resulting in reduced palm oil demand from these two giant economies. As a result of weak global demand, the CPO price has fallen to an average price of USD $712 per ton in September 2014, down 5.4 percent from the previous month.

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Malaysia announced that it has extended its zero export tariff for crude palm oil (CPO) until the end of the year in an attempt to boost sales. Malaysian Plantation Industries and Commodities Minister Douglas Uggah Embas said that this decision is aimed at preventing a further drastic fall in CPO prices. Palm oil futures declined by about 18 percent in 2014 amid an oversupply in combination with weak global demand. Indonesia and Malaysia are the world’s top palm oil producers and exporters.

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On 28 September 2014, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic topics such Indonesia’s fuel subsidies, US interest rates, poverty, inequality, GDP growth, palm oil, rice, the Anas Urbaningrum graft case, as well as the passing of a new bill that ends direct voting in the regions, and more.

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Palm oil ranks among the most important agricultural commodities of Indonesia as this country is the world’s biggest producer of palm oil. This implies that Indonesia generates important foreign exchange earnings from palm oil exports and is a source of income for millions of workers on the plantations.

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Over the past couple of months we have informed on the shortage of cooking oil on the Indonesian market, the subsequent inflationary pressures this shortage caused, and the policies that were imposed by the government to tackle this shortage. But, we did not devote an entire article to this topic.

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Both Indonesia’s export and import performance was quite amazing in March 2022. While we expected imports to rebound ahead of the start of the Ramadan month (on 1 April 2022), a month that typically gives rise to a big increase in consumption, we did underestimate Indonesia’s export performance in last month’s forecast.

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Although there is plenty of opposition to – and criticism on – Indonesia for allowing crude palm oil (or CPO) to play a big role in the domestic economy (Indonesia being the world’s largest producer and exporter of CPO), the country is currently feeling the windfall from soaring CPO prices. And, it is contributing to Indonesia’s recovery from the severe – and still ongoing – novel coronavirus (COVID-19) crisis.

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Indonesia is the world’s biggest palm oil grower as well as the world’s biggest exporter of crude palm oil (CPO). Traditionally, palm oil exports are ranked among the top three export products of Indonesia (along with coal and natural gas). As such, palm oil is of crucial importance for the Indonesian economy.

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It have not been great times for palm oil farmers and traders. Malaysia’s benchmark palm oil price is currently hovering near a three-year low of 1,949 ringgit (approx. USD $464.8) per ton amid high inventories, rising production and sluggish global demand.

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Several negative sentiments are putting pressure on the crude palm oil (CPO) price in the first week of March 2018. These sentiments are expected to continue pushing downward pressure on the CPO price in the remainder of this week. On Monday (05/03) the CPO price on the Malaysia Derivatives Exchange (May 2018 shipments) fell 0.28 percent to 2,467 ringgit per metric ton. Compared to one week earlier, the price has now declined 2.91 percent.

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In the battle between Indonesia and the European Union (EU) regarding the latter's anti-dumping duties on Indonesian biodiesel exports, Indonesia won six out of seven legal challenges. Indonesia had challenged the EU's duties, set in 2013, on biodiesel imports from Indonesia and Argentina. The World Trade Organization (WTO) ruled, largely, in favor of Indonesia.

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The crude palm oil (CPO) price is expected to strengthen in the first quarter of 2018 due to the impact of the La Nina weather phenomenon and rising CPO demand in the traditional big CPO importing countries. This is good news for stakeholders in the palm oil industry as the price has been sliding around 16 percent so far this year (toward the 2,700 Malaysian ringgit per ton level).

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Foreign exchange earnings are important assets for a national economy. Therefore, many nations have recently been taking a much more protectionist approach vis-à-vis trade in an effort to strengthen their trade positions, generate trade surpluses, hence see the inflow of more foreign exchange earnings. Foreign exchange assets support a stable local currency as well as economy.

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