Indonesia's crude palm oil production is set to increase 2.6% to 51.01 million tons next year, from 49.71 million tons in 2021, Estate Crop Fund head Eddy Abdurrachman said this morning.
Export demand in 2022 rose to 27.9 million tons, up from 27.08 million tons expected in 2021, he said. Domestic demand will rise to 11.4 million tons next year, from an estimated 11.10 million in 2021.
"We expect palm oil production to recover in 2022," said Eddy, who added that production was disrupted by weather patterns such as El Nino and La Nina in 2020 and 2021, leading to rising prices that year contributed.
Indonesia is the world's largest producer and exporter of palm oil.
The Estate Crop Fund, a government agency responsible for collecting export taxes, has made three price projections for the edible oil, from $ 747 per tonne to $ 1,094 per tonne.
Eddy said the baseline forecast used by the fund was the moderate price range of $ 821 to $ 1,032 per ton.
Higher demand in economies recovering from the COVID-19 pandemic and higher costs for competing oils would also have impacted prices, but "Our forecast for 2022 is that prices will normalize," he said.
This year's price surge has delayed the Fund's replanting programs, which aim to replace smallholder farmers' old palms with new ones using better quality seeds.
Farmers had delayed their applications to join the program, resulting in a decrease in total new plantation area to 42,200 hectares, down from 94,000 hectares in 2020.
According to the fund, Indonesia's domestic consumption of crude palm oil for biodiesel is projected to reach 10.15 million kiloliters in 2022, up from 9.4 million kiloliters estimated for that year.
Source
Hansa Terminhandel GmbH