PALMOILMAGAZINE, JAKARTA – Palm oil production in Indonesia, the world’s largest producer, may decline this year due to the dry season and aging trees. This could tighten supply and sustain high global prices.
The Indonesian Palm Oil Association (IPOA) and the Indonesian Palm Oil Board (IPOB) have predicted that palm oil production this year might stagnate or even decrease by 5 percent compared to 2023. Earlier this year, both organizations had anticipated an increase in production.
Data from the United States indicates that global palm oil supplies could reach their lowest level in three years. Malaysia, the world’s second-largest producer, is also experiencing supply issues due to aging trees and a shortage of workers.
Also Read : Assessing the Influence of Drought on Palm Oil Production
In 2023, Indonesia produced 54,84 million tons of crude palm oil while the previous three years, it was decreasing. IPOA predicted this year production could be at about 52 to 53 million tons.
General Secretary of IPOA, M. Hadi Sugeng said that about one third of palm oil producers in Indonesia, including Sumatra and some of Kalimantan got lower rain intensity that it was in July. This could be happening in August.
IPOA also predicted the stagnant production would be decreasing 5% this year. It was contrary with the increasing projection 5% that was mentioned in February 2024. US Foreign Agricultural Service reported that palm oil production in Indonesia since January to June got decreased 2% to the same period last year. The drought made palm oil tree produce less male flower and reduce fresh fruit bunch (FFB) volume.
Besides, the old trees would be a continuous issue for the industries. Many smallholders’ trees in Indonesia are more than 25 years old and should get replanting program to increase FFB production. It got decreased to be about 700 kilograms per hectares in some plantations, from the previous at about 830 kilograms, as Chairman of IPOB, Sahat Sinaga said. IPOB also predicted palm oil production could be decreasing about 3%, to the increasing production as it was mentioned in January 2024. (P2)
