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Indonesia’s Palm Oil Exports Rise on Higher Shipments to China

Bloomberg logoBloomberg 9/20/2020 Tassia Sipahutar and Eko Listiyorini
a truck parked on the side of a dirt road: Harvested palm oil fruit bunches sit in the back of a truck on the side of a road in East Kalimantan, Borneo, Indonesia, on Wednesday, Nov. 27, 2019. For Jakarta, a city on the island of Java saddled with some of the worst superlatives in the region⁠—most polluted, most congested, fastest sinking⁠—the floods were an old story, the third time deluges have killed dozens since 2007. The problems have become so overwhelming that, even before the latest catastrophe, President Joko Widodo had decided to build a new capital 1,200 kilometers away on the island of Borneo. © Bloomberg Harvested palm oil fruit bunches sit in the back of a truck on the side of a road in East Kalimantan, Borneo, Indonesia, on Wednesday, Nov. 27, 2019. For Jakarta, a city on the island of Java saddled with some of the worst superlatives in the region⁠—most polluted, most congested, fastest sinking⁠—the floods were an old story, the third time deluges have killed dozens since 2007. The problems have become so overwhelming that, even before the latest catastrophe, President Joko Widodo had decided to build a new capital 1,200 kilometers away on the island of Borneo.

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Indonesia’s palm oil exports increased in July on higher shipments to China and the Middle East, according to the Indonesian Palm Oil Association.

Total exports rose to 3.13 million tons from 2.77 million tons a month earlier, the association, known as Gapki, said in a statement on Sunday. While shipments to China increased 43% month-on-month, those to the Middle East surged 65%.

With average crude palm oil price climbing to $659 per ton in July from $602 in June, Indonesia’s palm oil exports’ total value surged to $1.87 billion from $1.62 billion, Gapki said.

Increasing food demand from top importers India and China and a rally in soybean oil fueled bullish sentiment and drove palm oil futures to advance to the highest level since January.

In China, the world’s biggest consumer of edible oils, people seemed to return to their normal activities, said Darin Friedrichs, a senior analyst with StoneX Group Inc. in Shanghai. “Since it’s impractical to leave the country to travel, everyone is spending money domestically,” he said in a recent note.

Consumption of the oil also climbed in Indonesia, driven by biodiesel. Domestic consumption increased 7% on a monthly basis to 1.43 million tons, according to Gapki.

Other highlights in July from Gapki:

Palm oil output fell 6% to 4.23 million tons from JunePalm oil stockpiles were down 8% to 3.62 million tonsGapki attributed the decreasing output and stockpiles to less fertilizer use as companies cut costs last year when the price was low

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