What is Indonesia's Palm Oil Production and Export Volume?

Indonesia's palm oil (CPO) production in 2016 reached only 31.5 million tons, a 3 percent decrease from the previous year. This decline was the first since 2010. Not only production, but Indonesia's CPO exports in 2016 also fell by 4.92 percent to 25.1 million tons compared to the previous year.

The Malaysian/Indonesian CPO price for the May 2017 contract on the Rotterdam commodities exchange closed at US$680 per metric ton on April 26, 2017, down 14.87 percent from its year-end 2016 position of US$790 per metric ton. The CPO price also decreased by 18.73 percent compared to the 2017 high of US$827.5 per metric ton on January 24.

CPO exports to Europe often face challenges because Indonesian palm oil plantations are considered to damage tropical rainforests, leading to a European Parliament resolution to ban the use of palm oil. However, palm oil industry players say that the difficulty in entering the European market is related to business competition. Europe already has vegetable oils such as canola oil, soybean oil, and sunflower oil. However, palm oil has advantages for both cooking and frying. Furthermore, palm oil production is more efficient than other oil production methods.