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Indonesia’s MOP imports rise sharply in 2017

16 Apr 2018, 11.53 am GMT

Indonesia's MOP imports rise sharply in 2017

London, 12 April (Argus) — MOP imports to Indonesia reached record highs last year, fuelled by strong crude palm oil (CPO) demand. But front-month CPO futures prices have a taken a sharp downturn in recent days, and January MOP imports to Indonesia are down by a quarter.

Imports were 3.36mn t last year, up by 26pc on 2016 and by 14pc on 2015, GTIS data show. This is the highest import figure since at least 1996. Prior to 2017, the highest level of imports to Indonesia was in 2011, when levels reached 3.12mn t, followed by 2.94mn t in 2015, and 2.89mn t in 2014.

Canada was the largest supplier last year, with a 38pc market share, followed by Russia and Belarus, with 21pc and 20pc, respectively.

All suppliers to Indonesia managed to increase import tonnages last year, but Uzbekistan went from supplying around 6,000t tonnes in 2016 to nearly 100,000t last year, while Jordan and Germany both more than doubled exports to the country.

But January 2018 MOP imports are down by a quarter on the year, to 257,000t, and front-month palm oil futures on the Bursa Malaysia have slid by 5pc in three days — to 2,350 ringgit/t today — which could prompt some short-term concerns among suppliers.

Despite the drop in January imports, Argus expects MOP demand to remain strong this year at over 3mn t. Indonesia's palm oil production is likely to rise by around one-fifth — or 8mn t — in 2018-25 as global demand increases, according to the Indonesian Palm Oil Association, underpinning demand for MOP.

The country's production could hit 46mn t/yr by 2025, from a forecast 38mn t in 2018, the association's executive director Fadhil Hasan said.

Global palm oil demand is forecast at 66.5mn t this year, up from 63.9mn t/yr last year, according to an average of predictions from various analysts.


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