El Nino Depletes Indonesia`s Palm Oil Stock


The Indonesian Palm Oil Association (GAPKI) reported there is a downtrend in the volume of palm oil stocks. According to GAPKI's record, Indonesia's palm oil stocks, including biodiesel and oleochemical, reached 1.8 million tons in June 2016.

GAPKI executive director Fadhil Hasan said on Tuesday that the stock decline was the result of last year's El Nino. "Production had stalled at the beginning of the year while we were still exporting," he said.

Looking at the downtrend, Fadhil estimated that in the next few months stocks are likely to be tight. "Because global market demand and domestic needs may still grow."

In June, palm oil export volume reached 1.88 million tons while domestic consumption reached 995,000 tons.

According to Fadhil, Indonesia's mandatory biodiesel use has been implemented consistently. Biodiesel absorption for domestic use continues to rise, and will boost the demand for palm oil.

"This will prompt businesses to keep their stocks to meet domestic demand rather than export," Fadhil said.


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