Palm oil shipments from Indonesia, the world’s biggest producer, jumped in March by the most for the month in at least seven years as China led a surge in imports of the cooking oil used in food and fuel.
Exports, that include palm and kernel oils, climbed 13.6 percent to 2.03 million metric tons from February, according to the Indonesian Palm Oil Association, known as Gapki, which started publishing the data in 2008. The increase is the first since October and beats the median estimate of 1.8 million tons in a Bloomberg survey.
Increasing demand may help curb a 19 percent decline in prices in the past year amid a plunge in crude oil costs that reduced palm’s allure as a biodiesel feedstock. Exports from Malaysia, the second-biggest producer, climbed 22 percent last month after posting an 18 percent drop in February, Malaysian Palm Oil Board data showed April 10. China is the world’s largest importer after India.
“Export performance has started to pick up, supported by the significant increase in demand from China, the Middle East, Africa and the European Union,” Fadhil Hasan, executive director of Gapki, said in a statement e-mailed Friday. “It seems the biodiesel development in China has started and CPO will probably be the basic material,” Fadhil said, referring to crude palm oil by its initials.
Futures traded at 2,136 ringgit ($588) a ton on Bursa Malaysia Derivatives on Friday after tumbling to 2,092 ringgit on April 10, the lowest since Dec. 1.
Exports to China surged 139 percent to 236,080 tons in March, after slumping 50 percent to the lowest since September in February, according to Gapki data.
Biodiesel production in China will probably increase 5 percent from a year earlier to 1.13 billion liters in 2014, according to an annual U.S. Department of Agriculture report published in January. The report estimates the country’s biodiesel production capacity at 4 billion liters.
Sales to the EU climbed 29 percent to 392,110 tons, extending an 18 percent gain in February, while shipments to India fell 1.4 percent to 433,780 tons, Gapki data showed. Exports to the Middle East rose 45% to 159,180 tons and to Africa by 57 percent to 143,580 tons.
Indonesia shipped 5.6 million tons of palm and kernel oils in the first quarter, a 14 percent increase from a year earlier, Gapki said. Exports last month compared with sales of 1.79 million tons in March 2014.