Palm harvest in a plantation in Medan, Indonesia. (Photo: AFP/VNA) Jakarta (VNA) – Indonesia is likely to use up 8.3 million tonnes of palm oilto meet domestic demand for biodiesel this year, rising concerns there won’t beenough palm oil left to export, according to the Indonesian Palm OilAssociation, or Gapki.
Last month, theIndonesian government began mandatory use of B30 – diesel fuel made up of 30percent biofuel from palm oil and is already preparing to use the upgraded version, B40, next year.
The country’sdemand for palm oil this year is estimated to reach 8.3 million tonnes, whichwill be processed into biodiesel, Gapki's executive director Mukti Sardjonosaid in a statement on earlier this week. It may reduce heavily the amount ofpalm oil available for export, he added.
Indonesia'scrude palm oil and palm kernel oil production hit a record 51.8 million tonneslast year, up 9.1 percent from 2018, despite a long drought.
Despite theadverse effects of the US-China trade war, India's tariff discrimination andthe European Union's biodiesel ban, exports still managed to gain 4 percent to36.2 million tonnes.
Gapkiestimated the export value of palm oil products, including oleochemicals andbiodiesel, had declined to 19 billion USD last year, down 17 percent from 23billion USD in 2018.
The decline inexport value could have been more severe, but the crude palm oil (CPO) pricerecovered after President Joko Widodo announced in his state address thatIndonesia would increase domestic use of CPO for biodiesel.
CPO priceclosed at 800 USD per tonne in Rotterdam port at the end of last year, almosttwice the August price, as Indonesia began using the B30.
According toGapki, the new coronavirus outbreak in China is likely to hamper Indonesia'spalm oil exports there.
China wasIndonesia's largest CPO and kernel palm oil market, buying a total of 6 milliontonnes last year ahead of India (4.8 million tonnes) and the EU (4.6 milliontonnes). China was also the biggest buyer of Indonesia's oleochemical andbiodiesel products who purchased a total of 825,000 tonnes.
Mukti said he hopesthe outbreak will not last too long since all export activities to China havebeen stopped temporarily.
Indonesiacould still look forward to the increase in CPO demand in other markets likeAfrica, which imported 2.9 million tonnes of palm oil products last year, up 11percent from 2018./.
VNA
