Indonesia is expected to export between 19 million and 20 million tonnes of palm oil in 2014, according to a leading industry association, a decline of up to 9.5 percent from the 21 million tonnes the world's top producer shipped in 2013. "Exports of CPO (crude palm oil), palm kernel oil and its derivatives in the first half of 2014 were so disappointing," Fadhil Hasan, executive director of the Indonesian Palm Oil Association (GAPKI), told reporters late on Monday.
Exports in the first half of 2014 amounted to 9.75 million tonnes, down from around 11 million tonnes in the first half of 2013, he said. Exports to Indonesia's main customers, India, China and Europe, were down significantly, Hasan said, adding that India had preferred to import rapeseed oil and China soy oil. Hasan explained that Indonesia's logistics and shipping costs had increased this year, while what he called a "black campaign" against Indonesian CPO continued to have an impact on sales in the global market.
CPO producers are struggling to promote themselves as environmentally acceptable after various media campaigns have revealed extensive rainforest clearance and the destruction of orang-utan habitats by palm oil plantation companies. The campaigns led international giants Unilever and Nestle to boycott palm oil from Sinar Mas Agro Resources and Technology, a unit of Golden Agri Resources Limited, in 2010, although both lifted the bans in 2011.
In addition, India has increased import duties on Indonesian palm oil this year, Hasan said. Domestic biodiesel consumption was also below an expected 3.3 million tonnes in the first half. There were deals for only 2.8 million tonnes, with 500,000-700,000 tonnes delivered, he said.
