RI palm oil exports drop from six -year high

JAKARTA. Palm shipments from Indonesia, the top producer, will probably drop this month and next as some importers bought most of their immediate needs in October when sales climbed to the highest since at least 2008. Futures fell, according to Bloomberg.

Exports may drop to about 2 million metric tons this month and to a little below 2 million tons in December, said Derom Bangun, head of the Indonesian Palm Oil Board. Shipments jumped 46 percent from a month earlier to 2.47 million tons in October, the Indonesian Palm Oil Association, or Gapki, said in statement on Nov. 21. That’s the highest level since the group started publishing the data in January 2008.

Palm oil, used in food and fuel, entered a bull market this month after Indonesia and Malaysia, the second-biggest producer, scrapped export taxes to boost demand. The tax-free shipments lured the world’s largest buyers India and China to boost purchases, Gapki said. The tax rate may stay at zero in December as well, the group said.

“Exports last month were extraordinary,” Bangun said in a phone interview from Jakarta yesterday. “Buyers are probably well covered now, so purchases may ease in coming months.”

Futures in Kuala Lumpur fell to 1,914 ringgit ($571) a ton on Sept. 2, the lowest since 2009. The plunge prompted Malaysia to scrap the tax for two months through October and later extend the exemption to December. Indonesia also cut taxes to zero for October and this month. That helped palm enter a bull market on Nov. 3. Prices dropped 0.6 percent to 2,191 ringgit on the Bursa Malaysia Derivatives by the midday break today.

Shipments to China jumped 390 percent to 275,850 tons in October from a month earlier and sales to India surged 140 percent to 733,630 tons, Gapki said on Nov. 21. Exports to the Middle East rose to 344,600 tons from 149,980 tons in September.