Indonesia’s crude palm oil (CPO) output held around its highest levels in a year in September to be little changed on the previous month, while exports rose to their highest since June, a Reuters survey showed. CPO output in September eased to 3.1 million tonnes from 3.198 million tonnes in August, according to the median estimate of a survey of three Indonesian industry officials and plantation companies.
With palm oil output entering its peak period during August and September, vegetable oil traders said October and November could see a further easing in production as the world’s top producer is expected to enter its wet season. Falling output and rising exports may support benchmark palm prices, which have added 2 percent this year and are currently tradng at 2,322 ringgit ($556) per tonne.
“October could again be slightly lower,” said Joelianto, a senior trader at PT Sinar Mas Agro Resources & Technology (SMART). “We are reaching the peak.” Indonesia is expected to face moderate El Nino dry conditions which could strengthen from September to December, while fires on Sumatra and Kalimantan have shrouded large parts of Southeast Asia in so-called “haze”. “The production drop was due to El Nino combined with the fires (and) haze,” said Sahat Sinaga, executive director at the Indonesian Vegetable Oil Industry Association (GIMNI).
The survey pegged exports at 2.235 million tonnes, the highest level since June and up 19 percent from August. Lower prices attracted more buying in September, especially from India, added Joelianto. According to the survey, Indonesian palm stocks were at 3.050 million tonnes in September, their lowest level since June and down from 3.392 million in August.
Indonesia’s consumption of the tropical oil was estimated at a range between 550,000 and 633,000 tonnes. The Indonesian Palm Oil Association (GAPKI) publishes monthly data provided by a professional surveyor, which last showed September exports at 2.34 million tonnes. The Reuters survey includes contributions from GAPKI, GIMNI and SMART, one of the largest listed palm companies.