USDA. Indonesian 2017/18 palm oil production forecast remains 38.5 million tons 21 February, 2018 at 10:02

With new mature area entering full production and expectations for above trend yields, the 2017/18 Indonesian palm oil production forecast is maintained at 38.5 MMT, a 5.5 percent increase from 2016/17, stated in USDA report.

The reasons for the continued strong production forecast are: 1) new mature area entering full production; and 2) expectations for above trend yields due to favorable weather conditions.

The 2017/18 human consumption forecast remains 5.75 million tons, and the industrial use forecast is unchanged at 3.6 million tons. The biodiesel industry is leading user of palm oil in the industrial sector, where the biodiesel is used only for the public transportation sector. However, in January 2018, the Government of Indonesia (GOI) announced plans to extend the biodiesel mandate program to nonpublic transit sectors, including mining.

With higher exportable supplies and competitive prices vis-à-vis soy oil, the 2017/18 palm oil export forecast remains 28 million tons, a slight increase 2016/17. As of February 2018, the palm oil export levy remained at 50 USD per ton for CPO, and 30 USD per ton for refined palm oil.