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Indonesia is stepping up restrictions on palm oil exports. But these measures of the world number 1 do not raise eyebrows on the market for the moment.
2023 is a tough year ahead for the Indonesian sector. Since January 1, producers have been subject to new restrictions: they cannot export more than six times the volume they sell on the local market, compared to eight previously.
From February 1, the country will also impose a new percentage of palm oil derivatives in biodiesel: 35% instead of 30% last year, which should capture two million more tonnes of oil, according to the Indonesian Association of Biofuel Producers.
A reassuring Indonesian production
These two measures will, in fact, limit exports. But for the time being, the Kuala Lumpur market, a benchmark in the sector, hardly raises an eyebrow.
On the one hand, the decline in Indonesian exports that is looming should be put into perspective since it will apply, via a percentage taken from a production that remains very good -50.82 million tonnes in 2023, according to GAPKI, the Indonesian Producers Association. It will also be offset by a drop in demand in Europe since the EU has decided to phase out palm oil from European biodiesel.
Finally, the market is probably reassured by the good news on the side of other vegetable oils. ” They are globally interchangeable and the market must therefore be considered as a whole “, explains Antoine de Gasquet broker at Baillon-Intercor. And on the whole, the production is good, adds the expert, whether it is that of soybeans in Brazil or Paraguay, those of rapeseed in Canada and Australia, or even those of sunflower despite the war in Ukraine, it there will be enough to compensate for the production defects that are looming, particularly in Argentina.
A hard-to-find request
The market therefore seems to be self-balancing for the time being, with biodiesel balancing the vegetable oil market. All in a context of uncertain demand: Indian purchases of palm oil certainly jumped last December – +94% compared to December 2021 –, but fears of recession are still very present.
► To listen: Palm oil: a booming market