The Covid-19 Pandemic, which has been going on for most of 2020, has caused a contraction in Indonesia’s trade, including in the export performance of the country’s non-oil and gas commodities, particularly. Based on Badan Pusat Statistik or Statistics Indonesia (BPS) data, however, the export performance of non-oil and gas commodities increased again in October 2020 by 3.1% compared to the previous month. The trend of increasing exports is driven, among others, by exports of fats and animal/vegetable group or crude palm oil (CPO) and its derivative products.
Based on BPS data, the export volume of palm oil commodities in 2020 reached 34 million tons or decreased by 9% compared to 2019 which reached 37 million tons. However, by value the export value of palm oil commodities in 2020 reached USD 22.97 billion or increased by 13.66% from around USD 20.21 billion in 2019.
Likewise, domestic consumption is also still growing positively. Based on data from Gabungan Pengusaha Kelapa Sawit Indonesia (GAPKI), palm oil’s domestic consumption 2020 recorded 17.349 million tons or increased by 3.6% compared to 2019. Consumption of food products contributed mainly to the domestic palm oil consumption.
The increasing consumption is supported by the increasing in food and beverage industry as well as the increasing demand for products that use palm oil as raw material, such as hand sanitizers, soaps, disinfectants, and so on. Thus, the players in this industry are quite optimistic about their performance next year. Production of crude palm oil (CPO) is predicted to increase again in 2021. It is targeted that the total production in 2021 could reach 49 million tons. The target is higher than the 2020’s total production, which reached 47 million tons.
In detail, based on data from GAPKI, domestic consumption of food and beverage in 2021 is projected to increase by some 3.2% to 8.7 million tons, and demand for oleochemicals will increase by around 6.2% to 1.8 million tons in 2021, from 1.69 million tons in 2020.
Specifically, for biodiesel consumption, GAPKI uses 2 (two) scenarios. If the government continues the B30 program, so the demand for biodiesel will increase by some 12% to some 8 million tons; but if the government decides to return to the B20 program, biodiesel’s demand will drop by some 25% or become 5.4 million tons.
As for exports, if the B30 program is continued, exports in 2021 will increase by around 10.3% to 37.5 million tons, from 32.26 million tons in 2020. Therefore, if B30 continues, the final stock in 2021 will be in the range of 7 million tons; However, if the government decides to return to the B20 program, there will be an additional final stock of around 2 million tons to 9 million tons in 2021.
The predictions already consider various factors, such as production output in 2020, especially in the second semester of 2020, and the weather factors such as the La Lina phenomenon, extreme rain, wind, and floods that can reduce the production output. The other factors are the second or third wave of Covid-19, the potential increase of commodity prices as triggered by the possibility of economic recovery and the availability of vaccines for coronavirus or Covid-19, and the global stimulus issued by the central banks in the United States, Europe, and the UK. The quality of oil palm fertilizer can also increase the production output, both in terms of quality and quantity.