Wednesday, October 29, 2008

The Indonesia CPO export markets down


Trade of crude palm oil (CPO) in international market is slowing down. Auction of 12,000 tons CPO into local market in the Joint Marketing Office of PT Perkebunan Nusantara Jakarta on Monday (27/10/2008), failed to sale. Eleven of domestic companies withdraw from the auction process. Reason is, price offered in the auction is still high around IDR 3,905-Rp 4,295 per kilogram (kg).

The government should be more proactive to develop new CPO export markets to reduce the number of domestic stock that continues to rise. Chairman of the Joint Entrepreneur Daily Kelapa Sawit Indonesia (Gapki) Derom Bangun in Jakarta, Monday, said, "Transactions are still running, but slowly. Demand is growing flagging, especially from the overseas market. "

From the total production of 17.2 million tons last year, domestic industries only  absorb around 4.5 million tons. These conditions make the national CPO market is very dependent on international price movements.

The future of Indonesian CPO exports are also be worried about. India as the country's second largest CPO exports in Asia is now set to consider the tariffs vegetable oil imports by 40 percent at November 2008. India vegetable oil producers demanded that the Indian government to raise the duties to protect domestic markets from the invasion import cheap products. According to the plan, the Government of India will decide this later on 3 November.

According to Executive Director of the Joint Industry Indonesian vegetable oils (GIMNI) Sahat Sinaga, CPO industry forced to survive at this time because there are no new requests. Employers are forced to continue to accommodate the processing of CPO because of the activities can not be stopped, while demand continues to wane. However, downstream CPO industry until now is still operating. Sahat said, oleochemical industries that produce various derivative products of CPO production is still as usual.

On the global crisis at 199,7 industrial commodities could benefit from the weakening of the rupiah against the U.S. dollar, but currently it has not happened. The tendency of weakening rupiah against the U.S. dollar during the past week it has not been able to raise up the price of CPO. "What happens now is because of weak demand. Not because expoter do not want to export. If in normal demand, certainly at this time is exportir feel the benefits because they buy in rupiah, and sell CPO in the U.S. dollar, "said Sahat.