Abundant Supply Of CPO Trigger January Export Decline

Senin, 24 Februari 2014 | 15:00

CPO export slumped early this year, driven by abundant supply in some world’s largest producer. In addition, bio fuel (BBN) mandatory force CPO-based biodiesel industry in Indonesia to distribute their products on domestic product.Based on the data summarized by Indonesian Association Palm Oil Operators (GAPKI), CPO export and its derivatives products in January only reached 1.57 million tons or declined 22.5% from the previous month which passed 2.02 million tons.

Gapki Executive Director Fadhil Hasan explained CPO demand from main countries despite the United States drastically decreased. Export CPO derivative products to India in January plummeted 54%.

The decrease was impact of the refined oil imports tax hike in India to 10% from 7.5%. "This was done to protect the refinery industry in the country which is currently used under 40% of the total capacity," he said in a press release last weekend.

Despite to India, CPO products export to Pakistan also fell 41.6% last month. Shipping to European Union and China were also down respectively 17% and 2% in January.

Export dropped to EU affected by antidumping duties policy for biodiesel products from Indonesia and Argentine. Meanwhile CPO export and its derivative products to US strengthened 22.5%.

Abundant Supply

Based on Gapki data, all the world vegetable oil prices at the beginning of this year due to the abundance supply after production in Indonesia and Malaysia have increased end of last year. It also happened in Brazil and Paraguay.

“The rain poured recently has ended dry period in Brazil and Paraguay. It is very beneficial to both countries, so the soybean crop was recorded increases as expected,” he explained.

FAO reported also rapeseed in Canada abundant thanks to slowing export. Stocks of sunflower seeds in the Black Sea region are also abundant. The surge vegetable oil raw materials supply triggered negative sentiment in world prices.

CPO price dropped 5% in January to $ 865/ton from US$ 909.6 /ton in the previous month. "Palm oil prices fell sharply due to the biofuels mandatory program effective by September 2013, so that CPO absorption as diesel mixing ingredients increased,” he said.

Nevertheless, the price of CPO in February is predicted improved starting with the reduced supply in Indonesia and Malaysia. Until the middle of this month, CPO prices move in the range of US$ 860-US$ 925 per ton.

by Wike D. Herlinda, Elok Ani Riani
source http://business.bisnis.com