Indonesia kept its export tax for crude palm oil (CPO) shipments at USD $18 per metric ton for March 2017 as the government's March reference CPO price was determined at USD $825.8 per ton, up 1.27 percent (m/m) from the reference price in the preceding month. When this reference CPO price of Indonesia is set below USD $750 per ton, the export tax is scrapped. When the price reaches the range of USD $750 - $800, then Indonesian authorities introduce a USD $3 per ton export tax, followed by a USD $18 per metric ton export tax if the reference price rises to the range of USD $800 - $850 per ton.

Read more ›

The Indonesian Palm Oil Producers Association (Gapki) announced that Indonesia's palm oil production realization reached 34.5 million tons in 2016, down 3 percent from a production figure of 35.5 million tons in the preceding year. The reason why Indonesia's palm oil output fell in 2016 was the El Nino weather phenomenon that brought dry weather to Southeast Asia. The unconducive weather conditions plagued harvests in the region, although the 3 percent decline was much softer than earlier predictions. Earlier, several analysts predicted a 15-30 percent (y/y) decline of palm oil output in Indonesia in 2016.

Read more ›

Indonesia, the world's largest producer and exporter of crude palm oil (CPO), set the export tax for its CPO shipments at USD $18 per metric ton for February 2017, significantly higher than the USD $3 per metric ton export tax in the preceding month. Indonesia's benchmark February CPO price was set at USD $815.5 per ton, rising further above the USD $750 per ton threshold that the Indonesian government uses to separate a zero export tax policy from the setting of an export tax.

Read more ›

The European Union (EU) is a key export market for Indonesian crude palm oil (CPO) producers. The EU consumed 6.3 million tons of CPO in full-year 2015, 65.2 percent of which (about 4.2 million tons) originated from Indonesia, the world's biggest palm oil producer and exporter. After India, the EU is Indonesia's biggest client in terms of CPO shipments. However, despite the big market for Indonesian CPO in the EU, there are major challenges for Indonesian CPO exporters due to negative (anti-palm oil) campaigns launched in the EU.

Read more ›

Based on the latest data from the Indonesian Oil Palm Estate Fund (BPDP-KS), Indonesia exported 25.7 million tons of crude palm oil (CPO) in full-year 2016, a 1.9 percent year-on-year (y/y) decline from 26.2 million tons of CPO shipments in the preceding year. However, in terms of value Indonesia's CPO exports actually surged 8 percent (y/y) to USD $17.8 billion in 2016. Indonesia is the world's largest exporter and producer of palm oil, followed by Malaysia.

Read more ›

Indonesia's Ministry of Trade re-introduces a USD $3 per ton export tax for crude palm oil (CPO) shipments in January 2017 as the government's reference palm oil price exceeded the USD $750 per ton threshold that separates the existence of export duties from zero rates. The government's reference price was set at USD $788.26 per ton for January 2017, said Dody Edward, Director General for Foreign Trade at the Trade Ministry.

Read more ›

In 2015 the crude oil supply glut stemming from OPEC countries and the US shale gas revolution put severe downward pressure on commodity prices, including crude palm oil (CPO). Thanks to the El Nino and La Nina weather phenomenons (and a moratorium on new palm oil concessions) CPO output was curtailed in 2015 and 2016, implying some upward pressure for CPO prices, hence rebounding from a multi-year low of USD $526 per ton in November 2015. In 2016 the CPO price is expected to average USD $670 per ton.

Read more ›

Global credit rating agency Moody's Investors Service believes Indonesia's non-financial companies, specifically those engaged in the commodities sector, will see improving corporate earnings in 2017 due to rising commodity prices and the economic recovery of the USA. In a report released on Monday (21/11), Moody's states that commodity prices are expected to continue their upward movement in 2017. This will trigger investment in the mining, oil & gas and crude palm oil (CPO) sectors.

Read more ›

Global demand for vegetable and animal oils is expected to reach 200 million tons in 2016, up 3 percent from demand one year earlier. About 70 million tons of total global vegetable and animal oils demand this year consists of crude palm oil (CPO). Indonesia, the world's largest CPO producer and exporter, is expected to produce about 30.5 million tons of CPO in 2016. Meanwhile, in the first nine months of 2016 Indonesia's CPO export realization stood at 18 million tons.

Read more ›

Eight commodity prices have been rising steadily so far this year on higher global demand. This rebound is expected to continue into 2017 although it will require a long time to touch the levels that we saw in 2011. The World Bank noted in a report released on 4 October 2016 that the prices of eight commodities - coal, crude oil, crude palm oil, copper, iron ore, tin, nickel and gold - have been rebounding so far this year. Rising commodity prices will support economic growth of Indonesia as Southeast Asia's largest economy is one of the world's largest commodity exporters.

Read more ›

Reserves of crude palm oil (CPO) in Indonesia may have declined for a second straight month in October on the back of drought and an increase in exports from Southeast Asia’s largest economy. The delayed impact of drought (which even managed to dry up several rivers in West Kalimantan in October) limited production of CPO in recent weeks. Meanwhile, exports have increased after Indonesia and Malaysia - the world’s two top palm oil producers - scrapped export taxes to boost demand for this commodity.

Read more ›

Foreign ownership of plantations in Indonesia may be limited to a maximum of 30 percent if a new draft bill designed by Indonesian parliament is approved. This draft bill aims to encourage local participation within Indonesia’s plantation sector at the expense of foreign ownership. Currently, foreign ownership of plantations in Indonesia is set at a maximum of 95 percent. The draft bill also aims to simplify complex rules regarding land use, protect indigenous people, and will make it easier to prosecute companies responsible for forest fires.  

Read more ›

Australia's Bureau of Meteorology is increasingly convinced that the world needs to prepare for a new El Niño cycle. According to the institution, the impact of this new cycle will be felt starting from July 2014 and may continue through the winter. Also the European Center for Medium range Weather Forecasting (ECMWF) and the US Climate Prediction Center stated that chances of a new El Niño cycle in 2014 are becoming higher, although it is too early to provide an indication of this year's strength of the weather phenomenon.

Read more ›

Indonesia has the potential to become a global force in the biodiesel industry because of the country’s position as the world’s top producer of crude palm oil (CPO). In 2014, Indonesia’s CPO production is estimated to total 30 million tons. Traditionally, Indonesia exports about 75 percent of its total CPO production, particularly to the giant economies of China and India. As such, this commodity is one of Indonesia's most important foreign exchange earners, apart from coal, in the non-oil and gas sector.

Read more ›

Statistics Indonesia (BPS), a non-departmental government institute, expects that Indonesia's trade balance will post a deficit of around USD $4 billion in 2014. The key question is whether increased manufacturing and agricultural exports can replace reduced raw mineral exports. The forecast of BPS is approximately similar to the country's trade deficit in 2013. Last year, Southeast Asia's largest economy recorded a deficit of USD $4.06 billion as the total value of exports amounted to USD $182.57 billion, while imports reached USD $186.63 billion.

Read more ›

The Indonesian government is considering to stop exports of crude palm oil (CPO) to Europe from 2014 onwards as domestic CPO demand in Southeast Asia's largest economy is rising, brought on by the country's biofuel industry which is expected to grow 70 percent next year to 5 million tons. To curtail oil imports, the government stimulates the production of crude palm oil-based biofuel by raising the mandatory content of fatty acid methyl ester (which is made from palm oil) in biodiesel products from 7.5 percent to 10 percent.

Read more ›

In order to curb imports of oil, the government of Indonesia intends to stimulate the production of crude palm oil-based biofuel by increasing the mandatory content of fatty acid methyl ester (which is made from palm oil) in biodiesel products from 7.5 percent to 10 percent. Through this policy, the government claims to be able to save up to USD $3 billion as it needs less fuel imports. Fuel imports totaled USD $5.8 billion in the first six months of 2013 and form a major cause for the USD $9.8 billion current account deficit in Q2-2013.

Read more ›

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.

Read more ›

Indonesian exports of crude palm oil (CPO) in June 2013 grew about 29 percent to 1.62 million ton compared to the same month last year. Although production of CPO in Indonesia slowed down in June, higher demand for Indonesia's CPO is met because there are still sufficient amounts of stockpiles. A high official at the Indonesian Palm Oil Association (Gapki) said that stockpiles in 2012 grew to 5 million tons as global demand for the commodity weakened sharply amid international economic turmoil.

Read more ›

The recovery in global palm oil prices that seemed to have started last spring, has ended. A few months ago, optimism had colored expectations of many analysts as palm oil prices went up about 10 percent between early May and mid-June, after tumbling 30 percent in 2012 (causing that palm oil was one of the worst performing commodities in terms of price growth last year). However, the palm oil price increase earlier this year was merely the result of falling production rates in Indonesia and Malaysia, the world's largest palm oil producers.

Read more ›