A La Nina event is expected to sustain itself into early 2017, resulting in an early onset rainy season, and providing relief to Indonesia’s palm oil industry from the dryness experienced throughout the Sumatera and Kalimantan production areas. MY 2016/17 production is thus expected to exceed 2015/16 production with 35 million MT. Indonesian palm oil consumption is led by biodiesel consumption. Indonesia’s Ministry of Energy and Mineral Resources reports that around 1.9 MMT of biodiesel were distributed between January and September 2016. Total palm oil consumption is expected to reach 3.6 MMT in MY 2015/16 and 2016/17, as the government has announced that allocations will not increase in the first half of 2016/17. Indonesian soybean production has declined slightly, as wet weather has prompted farmers to switch to more lucrative corn and rice crops.
Indonesia: Oilseeds and Products Update