Nusa Dua, CNBC Indonesia – Three large markets for Indonesian palm oil products hope that the government will make it easier to export this mainstay commodity. The three big markets are India, Pakistan and China.

India is the largest destination country for Indonesian palm oil exports. Due to the high demand for palm oil, India hopes that the Indonesian government will make it easier to export this commodity to India.

“We hope that the Indonesian Government can review the current policy,” said Dr. BV Mehta, Executive Director of The Solvent Extractors’ Association of India at the Indonesian Palm Oil Conference (IPOC) 2023, Nusa Dua Bali, Friday (3/11/23).

According to Mehta, many factors cause global demand to continue to increase. India’s population growth itself is still increasing, resulting in an increase in vegetable oil consumption, in 2008-2009 it amounted to 14.1 million tons, to 22.5 million tons in 2021-2022.

“Dependence on vegetable oil imports has currently reached 65%, and this is quite worrying,” said Mehta.

As vegetable oil production increases slowly, according to Mehta, demand increases rapidly, leading to an increase in imports. Mehta further said that the main commodity imported by India was palm oil, of which 60% was obtained from Indonesia, Malaysia and a small amount from Thailand.

“Palm oil consumption reached 25 million tons, or 33% of India’s total national vegetable oil consumption, followed by soybean oil (24%), and sunflower oil (8%). Palm oil is well known in the restaurant and catering sectors ,” said Mehta.

For example, meeting needs through domestic palm oil plantations, including inaugurating the Indian Palm Oil Sustainability Framework (IPOS) with the aim of running a sustainable palm oil industry.

Apart from India, Pakistan is also the main export destination country for Indonesian palm oil. It is hoped that the Indonesian government will also evaluate its palm oil export policy.

“The need for vegetable oil is quite large and our dependence on imports makes us hope that the Indonesian Government can review the policies it is implementing,” said Abdul Rasheed Janmohammed, Chief Executive of the Pakistan Edible Oil Conference (PEOC) and Westbury Group.

According to him, Pakistan will buy palm oil from Indonesia to meet the need for vegetable oil which will increase at the end of 2023 to early 2024.

Photo: Ist palm

Pakistan’s total consumption of vegetable oil is quite large, namely 4.5 million tonnes with local production of 0.75 tonnes. Rasheed said that the relatively small local production made Pakistan a country that needed vegetable oil imports of 3 million tons.

This need is further compounded by the fact that Pakistan has recently implemented a ban on genetically modified or GMO food products, so that the supply of incoming vegetable oils has become more limited.

“We hope that Indonesia will continue to open the export faucet to Pakistan, because our vegetable oil production is not enough to meet domestic needs,” said Abdul.

The same potential is also visible in the Chinese market. Although currently there is a trend of population decline that has occurred in recent years.

This will result in a decrease in demand for cooking oil. Alvin Tai, Soft Commodity Analyst at Bloomberg, said that this reduction in demand is unlikely to happen immediately. This means that there is still the possibility of high demand for palm oil for the next few years.

China, as one of Indonesia’s export destinations, he said, experienced a decline in demand caused by a decline in the population of productive age.

He predicts that the Chinese market will experience a decline in palm oil demand in the next 2 years.

“There is a pretty good opportunity for Indonesia to sell palm oil to us, before there is a decline in demand which will occur due to the decline in population in China,” said Alvin.

[Gambas:Video CNBC]

(hsy/hsy)