December 10, 2014

Palm oil stocks in Indonesia, the world’s top producer increased for the first time in three months as exports retreated from their highest level in six years. Reserves rose 7.1% month over month in November to reach 2.25 million tons. Exports fell by 7.3% to 2.29 million tons while production increased 4% to 2.35 million tons according to a survey compiled by Bloomberg. Indonesia temporarily eliminated export taxes on palm oil in October after Malaysia, the world’s second biggest producer reduced their taxes to zero in September. Indonesia’s decision to keep the tax rate at zero though the end of the year has lessened the pressure on buyers and orders have slowed. In October palm oil shipments from Indonesia climbed 46% to reach 2.47 million tons – the highest level since the Indonesian Palm Oil Association began publishing data in January 2008. Exports were approximately 2 million tons in November and are expected to be slightly below 2 million tons in December. Production is escalating as a result of trees planted four to six years ago coming into maturation – and being young and well-cared for, are proving to be less prone to the negative effects of adverse weather as older trees.

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