Indonesia Palm Oil Output Seen Rising for Fourth Straight Month

19.09.2016

Indonesia's crude palm oil (CPO) output likely rose for a fourth straight month in August, according to a Reuters survey, continuing to recover as the impact from a drought fades.

CPO production likely climbed 1 percent to 2.833 million metric tons in August from 2.802 million metric tons in July, according to the median estimate in a survey of three industry associations, a state palm research firm and one of Indonesia's largest planters.

Indonesia is the world's top producer of palm oil, used in everything from chocolate to cosmetics and biofuels, with the country's output levels closely scrutinised in edible oil markets. Production was hit last year by dry conditions from the El Nino weather pattern.

The survey also showed that August exports of Indonesian CPO were seen at 1.74 million metric tons, dropping from 1.875 million metric tons the month before.

"Exports fell because of lower demand. There could be harvesting in another region, while the global economic condition remains weak," said Fadhil Hasan, executive director at the Indonesian Palm Oil Association (GAPKI).

Domestic consumption remained stable at around 1 million metric tons, while stocks declined 9 percent to 1.7 million metric tons, the survey showed.

Previous GAPKI numbers showed the country exported 1.60 million metric tons ton of palm oil and palm kernel oil in July. Its August data is not yet available.

The August survey comprises responses from GAPKI, the Indonesia Palm Oil Board, the Indonesian Oil Palm Research Institute, and Sinar Mas Agro Resources & Technology , one of Indonesia's largest listed palm oil companies.


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