Palm oil shipments from Indonesia, the world’s largest producer, fell for the first time in three months in December as demand from China and Europe tumbled, a growers’ group said.
Exports, including palm and kernel oils, dropped 4 percent to 1.9 million metric tons last month from 1.98 million tons in November, according to data from the Indonesian Palm Oil Association today. That compares with the median estimate of 1.55 million tons in a Bloomberg survey last month and 1.51 million tons shipped in December 2011.
Declining exports may increase inventories and accelerate a 20 percent drop in futures in Kuala Lumpur in the past year. Shipments may extend the decline to 1.54 million tons this month and stockpiles may gain to 3.5 million tons from 3.25 million tons in December, according to the median of estimates from two plantation companies, a refiner and an analyst compiled by Bloomberg.
“It’s a slowdown in trade” due to December holidays, Joelianto, a Jakarta-based trader at PT Sinar Mas Agro Resources and Technology, said in mobile-phone text message.
Exports to China plunged 40 percent to 210,260 tons and sales to the European Union countries dropped 39 percent to 361,030 tons, according to data from the growers group known as Gapki. Shipments to India, the world’s largest buyer, jumped 26 percent to 670,820 tons in December from a month earlier.
Exports of palm oil and its by-products represented about 93 percent of the month’s total shipments, or 1.77 million tons, Gapki data showed. The drop in December exports was the first decline since September, the data showed.
Indonesia will raise taxes on crude palm oil exports to 9 percent for February from 7.5 percent in January, the Trade Ministry said yesterday. That may help Malaysia, which will maintain a zero-tariff policy for a second month in February to help clear record stockpiles, boost exports, said Ryan Long, vice president of futures and options at OSK Investment Bank Bhd. in Kuala Lumpur.
The contract for delivery in April advanced 1.4 percent to 2,478 ringgit ($805) per ton on the Malaysia Derivatives Exchange at 4:32 p.m. in Kuala Lumpur. The most-active contract is set for a 1.7 percent gain this month.
Indonesia exported 18.2 million tons of palm oil last year, a 3.4 percent increase from a year earlier, Gapki data showed. Shipments from the country may climb to a record 20 million tons this year, the group said Jan. 8. Output may expand 5.7 percent to 28 million tons, it said.