Malaysia Confirms Duty Free Palm Oil Exports in Jan; Indonesia to Follow?

Crude palm oil (CPO) prices are currently near five-year lows amid weak demand from China and India, the world’s two largest CPO importers. Moreover, due to declining oil prices, demand for palm oil-based biofuels has fallen.

CPO prices are not expected to recover soon and therefore Malaysia and Indonesia may maintain the zero percent export duty until March 2015.

Contracts for February fell 0.88 percent to 2,149 ringgit in Kuala Lumpur on Tuesday (16/12).

Indonesian Palm Oil Export in 2014:

Month	Volume   (million tons)
January	1.57
February	1.58
March	1.79
April	1.38
May	1.70
June	1.79
July	1.84
August	1.72
September	1.69
October	2.47
Total	17.53

^{Source: Indonesian Palm Oil Association (Gapki)}

Indonesian Palm Oil Production and Export:

 

	2008	2009	2010	2011	2012	2013	2014¹	2015¹
Production (million metric tons)	19.2	19.4	21.8	23.5	26.5	27.0	31.0	32.5
Export (million metric tons)	15.1	17.1	17.1	17.6	18.2	21.2	20.0	21.6
Export (in USD billion)	15.6	10.0	16.4	20.2	21.6	19.0	18.4

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

Key Findings:

• Malaysia and Indonesia expected to maintain duty-free palm oil exports in first quarter of 2015

• Global palm oil prices have been hovering near five-year lows due to weak demand from China and India as well as sharply weakening crude oil prices (curbing demand for palm oil-based biofuels)

• Forecasts for palm oil prices in the first quarter of 2015 remain bleak

Further Reading:

• Malaysia & Indonesia Expected to Maintain Duty-Free Palm Oil Exports
• Palm Oil Industry in Indonesia: Update on CPO Production & Export
• Analysis & Forecast of Indonesia’s Palm Oil Export and CPO Prices
• Analysis of the Palm Oil Industry in Indonesia

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