November 12, 2014

The growth rate of output of Indonesian palm oil is expected to be approximately 3% in 2015 – less than half the 7% rate of growth seen this year because of extended drought in the country’s main growing region of Sumatra. Production for the world’s top producing country is forecast to be 31.5 million tons next year, after 2014 production of 30.5 million tons, and 2013 production of 28.5 million tons. Crude palm oil exports for Indonesia next year are expected to remain flat at 19 million tons with Fadhil Hasan, executive director of the Indonesian Palm Oil Association noting that high domestic biofuel demand, and high demand from Pakistan will help mitigate any negative effects if India, Indonesia’s top buyer, decides to impose an import tax. Shipments of crude palm oil from Indonesia to Pakistan have jumped from 200,000 tons in 2011 to 1.2 million tons for the first nine months of 2014 after the two countries signed a Preferential Trade Agreement in September 2013, and domestic demand for biodiesel is expected to be 1.6 million tons this year after the government introduced legislation in August 2013 boosting the use of palm-oil derived biofuels in the country.

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