Palm Oil Exports from Indonesia Post Longest Slump Since 2008
After China cut purchases of palm oil used in food and fuel, exports from Indonesia, the world’s top shipper, fell for the fourth consecutive month in February in the longest slump in seven years.
Total shipments (including palm kernel oil) in February fell to 1.79 million tons, down from 1.8 million tons in January, and shipments bound for China fell by 50% to 98,980 tons, according to the Indonesian Palm Oil Association.
Data also shows that February shipments from Malaysia, the world’s second biggest supplier, fell 18% to 971,640 tons, their lowest point since 2007, reflecting a global decrease in demand for the oil as a record global supply of soybeans is making soyoil a competitively priced alternative.
The situation caused palm oil prices to fall by 22% over the past year, but it was not enough to increase Indonesian exports. The record supply of soybeans has caused soybean oil to fall by 29% in Chicago, cutting its premium over palm oil, however, a premium of $87 per ton still remains.
Not only did Indonesian shipments to China fall, but shipments to Bangladesh, the Middle East and Africa did, as well. In contrast, exports to India, the world’s biggest buyer, jumped by 47% to 439,720 tons and exports to the U.S. climbed 65% to 68,390 tons.