When CPO is Cheaper, Some Countries Increased the Demands

When CPO is Cheaper, Some Countries Increased the Demands

InfoSAWIT, JAKARTA –The cheaper crude palm oil (CPO) because of the abundant stock starts to be advantaged to increase the demands. For example, Pakistan did CPO import in May 2018 and increased 29% -indeed 3 months ago, the imports in the countries were stagnant.

“The increasing export volume in Pakistan happened for the cheaper CPO so the traders advantaged the chance to pile up the stock,” Executive Director of Indonesian Palm Oil Association (IPOA), Mukti Sardjono said in the official statement toInfoSAWIT, Monday (10/7/2018).

The increasing export volume also took place in the exports countries in Africa which increased about 29,5% or from 176,64 thousand tons in April to be 228,75 thousand tons in May. These were the highest volume in 2018.

When USA and China are in conflict, the CPO import in May increased too. For example, China’s demands increased 6% and the demands in USA increased 18%.

On the other hand, the cheaper CPO could not trigger the buying in India to pile up the stock. Ever since the expensive incoming tax for CPO runs, the demands in India were stagant and acute. In May 2018, India decreased CPO and its derivative imports reaching 31% or 346,28 thousand tons to be 240,16 thousand tons. India which had decreased its imports reaching more than 50% since the early of this year also contributed to the high stocks in Indonesia and Malaysia for no significant buying.

The CPO exports to European Union decreased for the abundant stocks of soybean and rapeseed. In May, European Union booked imports reaching 7% or from 385,10 thousand tons in April to be 359,31 thousand tons in May.

Because of this, IPOA hoped that the government of Indonesia should start to notice palm oil industries to keep the CPO price remain stable. The government should make or publish policy to increase the domestic consumption and increase the biodiesel usage more. Biodiesel Mandatory should run for the non – public service obligation (PSO) to increase the domestic consumption. “If the domestic consumption gets more, the stock would be stable and the global price would not be decreasing because of abundant stock,” Mukti said.

The other to do is to focus to Africa for it is potential but the infrastructure is still minimum. He continued, the government could publish policy, such as, decreasing the cooking oil export tariff in pack to Africa. “Africa could not trade the bulk cooking oil in cheaper price for the country has no infrastructure – pile tank,” Mukti said.(T2)


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