Indonesia’s ban on palm oil exports, short-lived though it turned out to be, had a large impact on market dynamics.
While Indonesia’s shipments slumped by 68% in May, which witnessed most of the three-week ban, rival Malaysia’s soared by 29%.
And although Indonesian exports have made up ground since, including a bumper 4.33m tonnes shipped in August, they remain cumulatively well behind last year’s pace.
The question now is whether Indonesia’s government – which has yet to decide on whether to prolong until December 31 a tax and levy holiday for the country’s palm oil shipments, as begun in July – views such data as supporting the case for an extension.
That said, the recent uptick in exports has done a good deal to draw down Indonesia’s stocks, to 4.04m tonnes in August from a high of 7.23m tonnes in May.
The government may want to wait for intelligence on what happened to exports (and production) in September, let alone signals on October dynamics, before making a decision on whether to forego further tax revenues.
| Indonesian and Malaysian palm oil exports for 2022, and month-on-month change
|Month||Exports||Month-on-month change||Exports||Month-on-month change|
|Total to August||Year-on-year change||Total to August||Year-on-year change|
|Sources: Gapki, GrainPriceNews, MPOB. Data in million tonnes