Indonesia’s 2022 palm oil exports seen down 3%

Indonesia's palm oil exports this year are expected to fall 3 per cent on a yearly basis to 33.21 million tonnes as local demand for the edible oil rises, industry group GAPKI said on Friday, adding that output is seen up by 4.5 per cent.

It was not clear if the forecast took into account the government's announcement a day earlier of a new measure to limit palm oil exports to try to curtail surging local cooking oil prices.

Shipments from Indonesia, the world's biggest producer and exporter of palm oil, in 2021 reached 34.23 million tonnes, while output stood at 46.89 million tonnes.

Under the new export rules, palm oil producers must set aside 20 per cent of their planned exports for the domestic market. The rules apply for CPO, olein and used cooking oil.

The market had anticipated 25 per cent production to be set aside for the domestic market, AmInvestment analyst Gan Huey Ling said in a client note on Friday.

"It appears that the allocation for the domestic market would be smaller than expected. Hence, there is more room for exports," the note said.

Anilkumar Bagani, research head of Mumbai-based vegetable oils broker Sunvin Group, said there was about 5.7 million kilolitres of cooking oil available locally.

"This new regulation is to ensure that quantity remains available domestically since the CPO price keeps increasing," Bagani said.

Indonesia's move, combined with concern over Malaysia's production woes, have been the main drivers of the palm oil rally.

Record high

malaysia's benchmark palm oil contract hit a new record high of 5,525 ringgit per tonne on Friday. [POI/]

Bagani expects the market focus to switch back to Malaysia's production concern.

In Indonesia, crude palm oil output this year is seen at 49 million tonnes, while palm kernel oil output is forecast to be 4.8 million tonnes, GAPKI said.