Indonesia 2012 Palm Oil Output, Exports May Rise, Gapki Says

Palm oil output and exports from Indonesia, the largest producer, are expected to rise this year as more palm trees mature amid strong demand from India and China, a producers group said.

Production may rise 6.4 percent to 25 million metric tons this year, the Indonesia Palm Oil Association, known as Gapki, said in a statement today. Exports may increase to 17.5 million tons to 18 million tons from an estimated 16.5 million tons last year, the group said.

Increased supplies from the Southeast Asian country may add to price declines in the commodity which fell about 16 percent last year in Kuala Lumpur after output in Indonesia and Malaysia, the second biggest producer, expanded and the European sovereign-debt crisis curbed demand.

“China and India will remain the main support for our export growth along with some new prospective markets such as the northern African and Middle Eastern countries,” Susanto, head of marketing at the group, told reporters in Jakarta today. “New production will be coming in from trees planted in 2008 and 2009, boosting output.”

Export to China rose 21 percent to 2.9 million tons last year, while shipments to India were relatively unchanged at about 5.7 million tons, Susanto, who uses only one name, said.

The price of palm oil in Rotterdam may range between $1,000 and $1,200 a metric ton this year, the group’s statement said. Palm oil in Rotterdam fell 19 percent last year and closed at $1,040 a ton on Dec. 30.

Palm oil futures for March delivery fell 0.5 percent to 3,209 ringgit ($1,023) a ton on the Malaysia Derivatives Exchange at 2:20 p.m. Jakarta time.

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