Wike D. Herlinda, Jakarta – Indonesian shipments of palm oil and its derivatives skyrocketed in August, pointing to a positive impact of the government's decision to temporarily suspend export levies.
According to the Indonesian Palm Oil Business Association (Gapki), exports of palm oil products amounted to 4.33 million tonnes in August, marking a significant jump from 2.7 million tonnes in July.
"The highest export increase was in processed crude palm oil [CPO], which soared from 1.92 million tonnes to 2.97 million tonnes," said Gapki's executive director Mukti Sardjono in a report released on Tuesday.
He attributed the export increase to the temporary levy suspension, which was recently extended to the end of the year.
"The levy [waiver] is very helpful for exporters so as to improve the competitiveness of Indonesian palm oil products in the global market amid strong competition with other vegetable oils," Mukti added.
Gapki data also show that the increase in exports was in line with a hike in the export value from US$3.8 billion in July to $4.79 billion in August, even though the CIF Rotterdam benchmark price fell from $1,203 per tonne in July to $1,095 per tonne the following month.
The biggest jump in demand came from India, with shipments spiking 193 percent from 370,800 to 1.08 million tonnes, followed by sales to China, which rose 68 percent from 524,000 to 879,007 tonnes and to the European Union, which increased 51.7 percent from 334,000 to 506,800 tonnes.
"The positive export numbers were also supported by an increase in domestic production, to 4.3 million tonnes in August from the previous month's 3.8 million tonnes. This increase in production is not only owed to seasonal factors but also to palm plantations operating [at normal capacity again]," said Mukti.
However, he underlined that, on a yearly basis, the cumulative production of 31.6 million tonnes as of August was below last year's 33.6 million tonnes for the same eight-month period.
Domestic consumption of 1.84 million tonnes in the month of August, meanwhile, was down 2.2 percent from July's 1.88 million tonnes, but up from 1.46 million tonnes in August 2021.
On a year-to-date (ytd) basis, domestic demand as of August amounted to 13.29 million tonnes, which was 8.5 percent higher than the 12.25 million tonnes sold in the home market during the same period last year.