Jakarta: Palm oil exports from Indonesia, the largest producer, jumped to a record after India and China stepped up buying amid signs of tightening supplies.
Shipments, that include palm and kernel oils, rose 12 per cent to 2.61 million metric tonnes in October from a month earlier, according to data released Tuesday by the Indonesian Palm Oil Association. That’s the highest ever, according to Fadhil Hasan, executive director at the group, known as Gapki.
Rising exports may help reduce stockpiles in Indonesia at a time when a haze from the Southeast Asian nation’s forest fires and El Nino are poised to hurt crops. Futures have rallied almost 30 per cent from a six-year low in August on concern that supply will fall. Global reserves will tighten in 2016 and should lift prices, according to researcher Oil World.
“Forest fires in Indonesia that have disrupted harvests was one of the factors that have increased palm oil demand and prices,” the association said in a statement. Exports increased as traders anticipated that supply will drop, boosting prices further, Gapki said.
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Exports to India last month rose 11 per cent to 679,380 tonnes, with Chinese purchases 36 per cent higher at 378,970 tonnes, Gapki data showed. Shipments to the US more than doubled to 117,740 tonnes, according to the group.
The haze from forest fires has blocked sunlight needed for photosynthesis, reducing size of palm fruits, said Gapki secretary general Togar Sitanggang said Tuesday in Jakarta.
The most-used cooking oil on Bursa Malaysia Derivatives closed at a one-month high of 2,382 ringgit a ton Monday, up 5 per cent this year.
