Indonesia's Palm Oil Consumption Rises, Especially for Biodiesel

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Adi Ahdiat 26/01/2023 14:20 WIB

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According to Gapki's report, domestic consumption of palm oil for biodiesel consistently increased during the 2018-2022 period.

Indonesia's Domestic Consumption Volume of Palm Oil (2018-2022)

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Indonesia's Palm Oil Consumption Rises, Especially for Biodiesel

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Indonesia's Domestic Consumption Volume of Palm Oil (2018-2022)

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According to the Indonesian Palm Oil Entrepreneurs Association (Gapki), domestic palm oil consumption in 2022 reached 20.9 million tons.

This consumption volume increased by approximately 13% year-on-year (yoy) compared to 2021, marking the highest record since 2018.

The most significant increase in consumption was for biodiesel, a liquid biofuel from organic matter with lower carbon emissions from combustion compared to fossil fuels.

In 2021, the volume of palm oil used for biodiesel production was 7.34 million tons. In 2022, this increased by 20.4% (yoy) to 8.8 million tons.

Palm oil consumption for biodiesel has consistently increased every year from 2018 to 2022, as shown in the graph.

In 2022, palm oil consumption for the food industry increased by approximately 11% (yoy), while consumption for the oleochemical industry increased by only 2.8% (yoy).

Despite the increase in domestic consumption, Indonesian palm oil exports in 2022 decreased by 8.5% (yoy) to 30.8 million tons. This is the lowest level since 2018.

According to Gapki, the decline in exports was influenced by many factors, ranging from extreme weather, the Russia-Ukraine war, a surge in vegetable oil prices in the global market, increased fertilizer prices, export ban policies, and the low achievement of the People's Palm Oil Rejuvenation Program (PSR).

"These unusual events significantly impacted the performance of the Indonesian palm oil industry," Gapki stated in its press release on Wednesday, January 25, 2023.

"The conditions affecting the palm oil industry throughout 2022 are expected to continue to affect palm oil performance in 2023. Production is expected to remain stagnant, while domestic consumption is expected to increase due to the implementation of the B35 mandate starting February 1, 2023," it continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."