2018 National Palm Oil Stock Below 3 Million Tons

Based on Index Mundi data, domestic consumption and palm oil exports in 2018 grew by 10.16% to 41.83 million tons from the previous year. Meanwhile, production and imports only increased by 5.06% to 41.5 million tons. As a result, national palm oil stocks decreased by 325,000 tons (10.82%) to 2.68 million tons compared to 3 million tons the previous year. National palm oil stocks are projected to fall another 50,000 tons in 2019.

The growth in palm oil consumption for food processing and the increase in consumption by the industrial sector have led to a decline in palm oil stocks. In 2018, palm oil consumption for food processing grew by 3.57% to 5.6 million tons from the previous year. Industrial sector consumption then grew by 28% to 6.4 million tons, and waste consumption for feed increased by 6.25% to 425,000 tons. Similarly, national palm oil exports increased by 8.28% to 29.2 million tons from the previous year.

The mandate for the use of biodiesel fuel with a 20% palm oil content (B20) has increased domestic palm oil demand for the industrial sector. Furthermore, the implementation of the B30 mandate starting in early 2020 will further increase the demand for palm oil for domestic biodiesel, thus potentially decreasing export volumes. For information, Indonesian biodiesel production, according to data from the Indonesian Biofuel Producers Association, grew by 36.18% in 2019 to 8.4 million kiloliters (kl). Domestic distribution grew by 70.47% to 6.39 million kl, while export volume decreased by 26.7% to 1.32 million tons.