The Indonesian Palm Oil Association (Gapki) expects that Indonesian exports of crude palm oil (CPO) and palm oil derivatives will increase between 10 and 15 percent to 11.29 million tons in the second half of 2014 from 9.82 million tons in the first half of this year. If achieved, then total CPO exports (and derivatives) from Southeast Asia’s largest economy in 2014 would be 21.11 million tons. Assuming an average CPO price of USD $895 per ton, these exports can be worth USD $18.89 billion in total.

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Demand for Indonesian crude palm oil (CPO) - both global and domestic demand - surged, giving rise to impressive corporate earnings reports of Indonesian palm oil producers in the first quarter of 2014. Combined, net profit of plantation companies that are listed on the Indonesia Stock Exchange, rose 116 percent. Indonesia's plantation sector is dominated by production of crude palm oil products and derivatives. Because of increased global demand, the value of Indonesian CPO exports is expected to rise to USD $22-24 billion.

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The Indonesian Palm Oil Association (Gapki) stated that exports of Indonesian crude palm oil (CPO) and its derivatives have increased 13 percent to 1.79 million tons in March 2014 from 1.58 million tons in the previous month. The increase was particularly due to a surge in the price of soybeans since February which makes importers shift their focus to CPO and its derivatives as a substitute for soybeans. Moreover, CPO prices have risen due to speculation about the looming El Niño cycle and declining stockpiles in Indonesia and Malaysia.

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Export of Indonesian crude palm oil (CPO) as well as derived products is expected to reach 22 million tons in 2014. As this year's CPO price is expected to average USD $1000 per ton, significantly higher than the average of USD $850 per ton in 2013, it will translate into higher revenue from the country's palm oil sector. The value of Indonesian CPO export in 2014 is estimated to accelerate to USD $22 billion due to dry weather threatening crops in Indonesia and Malaysia. Indonesia is the world's largest producer and exporter of palm oil.

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The government of Indonesia will lower the export duties on crude palm oil (CPO) from 10.5 percent in August to 9 percent in September if the CPO price continues to stay between USD $800-850 per ton. This lower tax policy is done in order to stimulate export revenues amid persistent weak global commodity prices. The international palm oil market is expected to remain stagnant in August and September. Stockpiles of CPO in Malaysia and Indonesia are projected to rise between September and December 2013.

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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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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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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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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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Indonesia's largest supplier of crude palm oil (CPO), Astra Agro Lestari, is expected to see improving corporate earnings in the years ahead on the back of the rising CPO price and expectation of the company's climbing CPO production volume. The year 2016 was a good year for Astra Agro Lestari as it reported a 224.2 percent year-on-year (y/y) jump in net profit and a 7.6 percent (y/y) increase in sales, led by sales of CPO and derivative products. This was a great recovery from the preceding year. CPO and derivative products account for more than 86 percent of the company's total sales.

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The higher crude palm oil (CPO) price will have a positive impact on the corporate earnings of Indonesian CPO producers, including Sampoerna Agro. Benchmark palm oil futures for March 2017 delivery on the Bursa Malaysia Derivatives Exchange were at 3,161 ringgit (approx. USD $706) per ton at the end of last week, near a four and a half year high. However, not all analysts advise investors to purchase shares of Sampoerna Agro, a company that is listed on the Indonesia Stock Exchange.

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The crude palm oil (CPO) price touched its highest level so far this year. On Tuesday (20/09) palm oil futures (December delivery) - traded on the Kuala Lumpur exchange - ended the day at 2,690 ringgit (approx. USD $651 per metric ton). Palm oil prices are rising as CPO production in Indonesia and Malaysia will remain subdued this year due to droughts that were brought by the El Nino weather phenomenon earlier in 2016, while there is expectation of a rather wet season later this year due to the La Nina weather phenomenon.

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Indonesia's crude palm oil (CPO) exports rose 9 percent month-on-month (m/m) to 2.29 million tons in February 2016 on the back of growing CPO demand in Africa, Bangladesh, India and the European Union. Indonesia's February CPO export volume was better than estimated previously. Analysts had expected a figure below 2 million tons. Combined, Indonesia's palm oil exports reached 4.39 million tons in the first two months of 2016, up 22 percent (y/y) from the 3.59 million tons of CPO that Indonesia exported in the same period one year earlier.

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Crude palm oil (CPO) production in Indonesia and Malaysia is expected to decline due to the impact of the El Nino weather phenomenon (that brought a prolonged dry season to Southeast Asia). CPO production in Malaysia could fall between 1.5 and 2 million tons this year according to Dorab Mistry, Director at Godrej International. Declining output in the world's two leading palm oil producers and exporters implies that palm oil prices should be able to rise further. At the start of this week palm oil futures traded in Kuala Lumpur (June delivery) rose to 2,779 ringgit (approx. USD $695) per ton, the highest level since March 2014.

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