Tue, 15 Aug 2006

CPO exports to India expected to reach 1.4 million tons this year

The Jakarta Post, Jakarta

An industry association has revised upward Indonesian's exports of palm oil products to India after the latter cut import duties last week.

Indonesian Palm Oil Producers Association executive director Derom Bangun said Monday that with lower import duties, Indonesia could export up to 1.4 million tons of palm oil products to India in 2006, higher than the previous estimate of 1.3 million tons.

Last week, in a bid to lower domestic prices of edible oils and curb inflation, India cut its import duties on palm oil to 70 percent from 80 percent. It also cut the duty on refined bleached and deodorized palm oil to 80 percent from 90 percent.

Derom said that despite the upward revision, Indonesia's palm oil exports to India in 2006 would be lower than last year's 1.96 million tons due to an increase in the South Asian country's palm oil production.

"With the estimated increase in domestic production, India is likely this year to import only about 2.2 million tons of palm oil, far lower than the four million tons last year," he said.

India uses palm oil for producing cooking oil, soap, industrial lubricants and detergents.

Derom said he was optimistic that this year's export target of 1.4 million tons of palm oil to India could be achieved as exports during the first three months had already reached 456,031 tons.

Based on this figure, India bought the biggest percentage of Indonesia's total palm oil exports of 2.48 million tons in the first quarter, followed by China, which bought 322,556 tons, he said.

"With the increase in exports to India, I estimate that Indonesia's total palm oil exports in 2006 will increase to 11.3 million tons from 10.38 million tons in 2005," Derom told The Jakarta Post.

The estimated increase in total palm oil exports would be supported by a projected 14 percent increase in production to 15 million tons this year from 13.6 million tons in 2005, he said, adding that part of the production would be sold on the domestic market.

The demand for palm oil in Indonesia is 3.5 million tons per year for use in the production of cooking oil, instant noodles, soap and chemical oil, with the rest of the country's production being exported, he added.(05)