Indonesia sees drop in palm oil exports to China due to coronavirus

Indonesian farming ministry officials say the country’s palm oil exports to China have declined due to a drop in demand for the vegetable oil as a result of the novel coronavirus (Covid-19) outbreak, Reuters reported on 17 February.

Last month, palm oil experienced its steepest weekly decrease in demand since the global financial crisis, according to a Bloomberg report on 28 February.

Data from Indonesian farming ministry officials showed that palm oil exports from Indonesia totalled 84,000 tonnes up to 17 February compared with 371,000 tonnes for the full month of February last year. In the previous month, it exported 483,000 tonnes to China.

The export volume to China was still expected to increase from the mid-month figure, but Chinese demand had been hit by the epidemic, said Ali Jamil, head of the agriculture quarantine body at the ministry.

“Coronavirus is having some impact on our exports,” Kasdi Subagyono, the ministry’s plantation director general said. “But this is only for China. As a whole, exports have still increased.”

China was the main destination for Indonesian palm oil exports in 2019, according to data from the Indonesia Palm Oil Association, accounting for 19% of total exports.

According to data compiled by Worldometer on 5 March, the total number of Covid-19 cases had risen to 80,430 in China with 3,013 deaths. Outside China, more than 15,176 infections had been confirmed, with 274 deaths.

The outbreak has disrupted business activities across China and is expected to cut demand for a range of imported commodities.