Riani Sanusi Putri, Jakarta – The Head of the Indonesian Palm Oil Association (Gapki) Eddy Martono says that the palm oil industry in Indonesia is currently slowing down. Eddy mentions that compared to last year, the export value of palm oil has decreased.
"The condition [of the palm oil industry] is relatively bad, the export of palm oil in Indonesia is increasing but the number is decreasing," he said in a discussion in West Bandung on Wednesday, August 23, 2023.
The cause of this condition is the declining price of global vegetable oil.
According to Gapki, the value of crude palm oil exports from January to June this year was only US$14.6 million. The number sharply declined from the previous year at the same period with US$17.63, despite the increasing number of exports from US$12.040 to US$16.313 in 2023.
Additionally, Eddy explained that palm oil only has 33% of the target market while the rest is vegetable oil. Meanwhile, he believes that palm oil cannot stand on its own, meaning the condition of vegetable oil affects palm oil.
For example, at the start of the Russia-Ukrane war, the price of vegetable oil rose sharply, causing Indonesia to implement a palm oil export ban. At the time, palm oil production was halted completely.
According to Eddy, the export ban is the root cause of the decline in prices. The international market knows that the measure will cause an excess of crude palm oil stock, causing them to delay purchases to wait for the prices to cool down.