The Indonesian Palm Oil Association (GAPKI) recorded that crude palm oil (CPO) production in 2023 reached 50.07 million tons, an increase of 7.15 percent from 2022 of 46.73 million tons.
In addition, palm kernel oil (PKO) production reached 4.77 million tons, up 5.66 percent from 2022, which was 4.52 million tons.
Chairman of GAPKI, Eddy Martono, revealed several things that made production in 2022 increase. First, palm oil prices towards the end of 2021 and throughout 2022 were relatively high.
“So as to encourage business actors to manage their plantations well, including fertilizer,” Eddy said at the GAPKI 43rd Anniversary Celebration and Press Conference at Ayana Midplaza, Jakarta, Tuesday (27/2).
Second, continued Eddy, there is an expansion of the area that has produced in 2023. This is in accordance with data from the Ministry of Agriculture in the period 2017-2020 there was an expansion of 540 thousand hectares and it is estimated that in 2023 there will be an additional area of Producing Crops covering an area of 260 thousand hectares.
“The third is El Nino, which was originally expected to hit Indonesia, apparently did not affect the production of oil palm crops, because it hit most of southern Indonesia,” continued Eddy.
Meanwhile, Eddy said that domestic consumption showed an increase from 21.24 million tons in 2022 to 23.13 million tons or an increase of around 8.90 percent.
The effective implementation of the Biodiesel (B35) policy in July 2022 has increased palm oil consumption by 17.68 percent, from 9.048 million tons in 2022 to 10.65 million tons in 2023.
“With the implementation of B35, biodiesel consumption during 2023 has exceeded consumption for domestic food,” he said.
The export of CPO and PKO products, said Eddy, decreased by 2.38 percent from 33.15 million tons in 2022 to 32.21 million tons in 2023. Meanwhile, exports for biodiesel and oleochemicals increased by 29 thousand tons and 395 thousand tons, respectively.
“A large decline in exports occurred for Eni Europe’s destination, which was 11.6 percent from 4.13 million tons in 2022 to 3.70 million tons in 2023,” said Eddy.
In contrast, exports to African destinations rose by 33 percent from 3,183 thousand tons to 4,232 thousand tons, China rose 23 percent from 6,280 thousand tons to 7,736 thousand tons, India rose 8 percent from 5,536 thousand tons to 5,966 thousand tons and the United States (US) rose 10 percent from 2,276 thousand tons to 2,512 thousand tons.
The decrease in the average price of palm oil during 2023 compared to 2022 in the Ciff Rotterdam market by 28.7 percent caused a significant decrease in the value of Indonesian palm oil exports from US$ 39.07 billion in 2022 to US$ 30.32 billion in 2023.
“With initial stocks in 2023 of 3.69 million tons, the final stocks of Indonesian CPO and PKO products in 2023 are estimated to reach 3.14 million tons,” added Eddy.