Indonesia CPO export revenue down 30%<\/p>\n
JAKARTA (JP): Indonesia crude palm oil (CPO) export revenue
\nbetween January and April this year fell by around 30 percent
\ncompared with the same period last year, as a plunge in world CPO
\ndemand pressured prices, the government said on Tuesday.<\/p>\n
Minister for Industry and Trade Luhut B. Pandjaitan put no
\nfigure on Indonesia's CPO export revenue.<\/p>\n
But CPO output last year was some 6.5 million tons, and an
\nestimated 7.5 million tons this year. Indonesia exports around
\nhalf of its CPO production.<\/p>\n
\"In the early months of this year we saw CPO prices sink to
\nabout US$200 a ton,\" Luhut told reporters on the sidelines of
\na hearing with the House of Representatives' Commission V for
\nindustry and trade affairs.<\/p>\n
Oversupply and competition from its substitute, soybean oil,
\ncaused CPO prices to fall from 1999.<\/p>\n
Last year CPO prices averaged $260 per ton, as against a hefty
\n$700 per ton in 1998.<\/p>\n
But Luhut said he was confident Indonesia could make up the
\nlosses on the back of recovering CPO prices and higher demand.<\/p>\n
\"Because prices are improving, as well as demand, I think we
\ncan recover the shortfall (in CPO export revenue),\" he said.<\/p>\n
Right now, he said, CPO prices have recovered to around $240
\nper ton.<\/p>\n
Early this year, the world's two largest CPO producers
\nIndonesia and Malaysia, announced an alliance to prop up CPO
\nprices and demand.<\/p>\n
The two countries, which control about 90 percent of world CPO
\nproduction, said they would lobby giant CPO consumers India and
\nChina to import more CPO.<\/p>\n
They would ask India to lower its import tariffs on CPO, and
\nChina to raise its palm oil export quotas.<\/p>\n
Luhut said the government took up the task of lobbying the two
\nmarkets, as local businessmen lacked aggressiveness in marketing
\ntheir CPO products.<\/p>\n
He said he recently met Chinese officials to persuade them to
\nraise Indonesia's CPO export quota.<\/p>\n
Judging from the meeting he had, Luhut said he was confident
\nthe Chinese government would grant Indonesia another 500,000 tons
\nto 600,000 tons in CPO export quotas.<\/p>\n
\"China is likely to raise the current quota by 1.2 million
\ntons to between 1.5 million to 1.6 million tons,\" he said.<\/p>\n
According to him, China was close to meeting Indonesia's
\nrequest as demand for CPO in that country was growing.<\/p>\n
Indonesia's alliance with Malaysia also identified new palm
\noil markets in countries such as the former Soviet Union,
\nincluding Ukraine, and Georgia.<\/p>\n
Besides joint marketing efforts, the two countries agreed to a
\njoint campaign, research and development efforts for palm oil.<\/p>\n
But chairman of the Indonesian Palm Oil Producers' Association
\n(Gapki) Derom Bangun remained skeptical about the cooperation's
\nsuccess.<\/p>\n
In April, he predicted that oversupply would continue to
\nthreatened CPO prices, despite a pact between Malaysia and
\nIndonesia.<\/p>\n
He said efforts to curb supply in the market would fail, as
\nCPO production in the two countries continued to increase.<\/p>\n
According to him, the oversupply would cause palm oil prices
\nto remain low, at about $260 per ton at least until next year.<\/p>\n
India's move to restrict imports of palm oil products would
\ndrive much of Indonesia and Malaysia's CPO products into other
\nmarkets, driving prices down further.<\/p>\n
He said that lacking in concrete action, the cooperation would
\nhave little impact on the market.(bkm)<\/p>",
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