Palm oil stock levels in Indonesia dropped in January due to lower production and increased exports, according to data from the Indonesian Palm Oil Association (Gapki) reported by AgriCensus.
The end of January stock level of 3.099M tonnes was 13% lower than in December, and 34% less compared to levels in the same period the previous year, the 27 March report said.
Palm oil – comprising crude palm oil (CPO) and crude palm kernel oil (CPKO) – output in January fell by 11.3% compared to the previous month to 4.26M tonnes mainly due to seasonal factors, AgriCensus wrote.
Palm oil production in January last year was 4.23M tonnes, the report said.
Increased exports also contributed to falling inventory levels, with Indonesian palm exports (comprising CPO, processed CPO, CPKO, processed CPKO, biodiesel and oleochemicals) reaching 2.95M tonnes, 7% higher compared to December and 35% higher year-on-year.
Exports to Egypt, Italy and Singapore showed a strong recovery in January, rising between 53% to over 500% compared to December, while exports to Bangladesh, Pakistan, Russia and Vietnam dropped by more than 50% in December, Gapki said in its statement.
Meanwhile, domestic consumption fell in January by 7.6% compared to the previous month, mainly due to lower demand from the food sector.
Food sector consumption reached 793,000 tonnes, 12% lower compared to December, while consumption levels in the oleochemical and biodiesel sectors were around the same as the previous month at 183,000 tonnes and 810,000 tonnes respectively, compared to 185,000 tonnes and 850,000 tonnes in December.
Indonesian palm oil exports in February were expected to be lower due to tightened export restrictions, with cargo surveyor estimates forecasting the level at about 1.997M tonnes, the report said.
Earlier this year, the Indonesian government further restricted its palm oil exports by suspending two-thirds of existing unused export permits (which exporters receive when they have completed a ‘domestic market obligation’ [DMO] of selling a percentage of their products locally) and raising the DMO target from 300,000 tonnes/month to 450,000 tonnes/month from February to April in a bid to raise local cooking oil supply and control prices.
For February, 80.03% of the DMO target was achieved with 360,150 tonnes of cooking oil distributed, the report said.
As of 26 March, only 221,659 tonnes of the 450,000 tonnes cooking oil target for the month had been distributed, a trade ministry official was quoted.