Palm oil shipments from Indonesia, the world’s largest producer, fell for a fourth month in February in the longest slump in at least seven years after China cut purchases of the cooking oil used in food and fuel.
Shipments, which included palm kernel oil, fell to 1.79 million metric tons from 1.8 million tons in January, the Indonesian Palm Oil Association, or Gapki, said on Wednesday. Export to China fell about 50 percent to 98,980 tons in February, data showed.
The slump in Indonesia’s exports highlights declining demand for the world’s most consumed cooking oil after figures showed shipments from Malaysia, the second-largest supplier, fell last month to the lowest since 2007. Global supplies of soybeans, used to make an alternative oil, expanded to a record, sending palm oil prices down 22 per cent in the past year.
“A decline in prices were not enough to increase exports from Indonesia,” Gapki said in the statement. A slowing economy in China and cheap prices of alternative oils such as soybean oil, have reduce demand for palm, it said.
Indonesia’s shipments dropped to destinations including Bangladesh, the Middle East and Africa, data showed. Sales to India, the largest buyer, jumped 47 per cent to 439,720 tons, while exports to the US surged 65 per cent to 68,390 tons, Gapki said. Exports from Malaysia dropped 18 per cent to 971,640 tons in February, bringing the decline in the first two months to 20 per cent, according to Malaysian Palm Oil Board data.
Indonesia may extend the zero tax for most palm oil exports in April as average price is still below $750 a ton, Gapki said.
Bloomberg News, edited by ESM
