Indonesia’s palm oil exports dropped by 10% in November, totaling 2.01 million tonnes, following a four-month high of 2.23 million tonnes in October. The decline was largely attributed to a cooling in demand after the Diwali festival, according to cargo surveyor Intertek Testing Services (LON:ITRK) (ITS).
India, which is Indonesia's largest palm oil export market, sees a surge in edible oil demand leading up to Diwali, as both commercial and retail buyers replenish stocks ahead of the festival. The hospitality, restaurant, and catering sectors—known collectively as HORECA—ramp up their purchases to meet the heightened consumer demand during this period. Seasonal spending during Diwali usually accounts for a significant portion of HORECA’s annual sales, driving an uptick in palm oil imports during this time.
However, with Diwali festivities concluding, palm oil imports from Indonesia saw a sharp drop. Shipments to India fell by 36%, dropping to 335,675 tonnes in November, compared to 530,159 tonnes in October. Over 90% of these exports consisted of crude palm oil (CPO) and refined bleached deodorized (RBD) palm olein, the primary edible oils consumed in India.
The decline in exports was further impacted by India’s decision to raise its import duties on edible oils earlier in the year. In September, India increased its import duties on CPO, crude degummed soybean oil, and crude sunflower oil to 27.50%, up from 5.50% previously. Additionally, the duties on refined palm oil, soyoil, and sunflower oil were raised to 35.75%, from 13.75%.
Other key markets also saw declines in palm oil imports. Exports to Bangladesh fell by 15.5%, dropping to 107,100 tonnes in November from 126,750 tonnes in October. Nearly all shipments to Bangladesh were made up of RBD palm olein, the most commonly consumed edible oil in the country.
In the Middle East, exports to Egypt plummeted to zero in November, a significant drop from 48,501 tonnes in October. This led to a 26% decline in overall exports to the region, falling to 213,590 tonnes in November from 288,659 tonnes in October. Similarly, exports to the European Union dropped by 34.9%, falling to 153,778 tonnes in November from 236,557 tonnes in October. Key markets in the EU, such as the Netherlands, Greece, and Italy, all saw declines in imports.
However, there was a bright spot for Indonesia in the form of China, which increased its imports of palm oil by 11.8%. Shipments to China rose to 364,167 tonnes in November, compared to 325,727 tonnes in October. Notably, exports of olein to China also increased, rising by 14.7% to 188,715 tonnes in November.
Looking at the bigger picture, Indonesia’s cumulative palm oil exports from January to November amounted to 22.01 million tonnes, a decline of approximately 2.56 million tonnes, or 10.1%, compared to the same period in 2023, when exports totaled 24.61 million tonnes. The drop in exports aligns with a reduction in Indonesian CPO production, which totaled 35.54 million tonnes in the first nine months of 2024, down by 4.61% from 37.26 million tonnes during the same period last year, according to data from the Indonesian Palm Oil Association (GAPKI).
Overall, while Indonesia’s palm oil exports in November faced a significant decline, the seasonal nature of the market and changing tariff dynamics played a crucial role in shaping these trends.