Indonesian palm oil inventories rose on the month in May as production spiked to a 31-month high, according to data from the Indonesian palm oil association (Gapki).
Total palm oil stocks in the world's largest palm oil producer reached 4.67mn t at the end of May, an increase of 28pc from the previous month, Gapki data show. But this was 35pc lower than inventories at the end of May 2022, when Indonesia banned exports in an effort to tame domestic prices.
Crude palm oil (CPO) production reached its highest level since October 2020 at 4.63mn t in May, having risen by 12pc from the previous month and 49pc from a year earlier. Output has increased because of better weather, after three consecutive La Nina phenomena that brought excess rainfall and increased flooding from September 2020-March 2023.
Exports increased in May as Indonesia lifted curbs on overseas sales of palm oil products, which had been implemented to shore up domestic cooking oil supplies before the Eid al-Fitr holiday at the end of April.
Total exports of palm oil products — including oleochemicals and biodiesel — increased slightly to 2.23mn t in May, higher by 4.7pc from an 11-month low of 2.13mn t in April. Exports to India and African countries rose the most on the month, according to Gapki, likely as average CPO prices fell from the previous month and supported purchases from price-sensitive consumers.
CPO exports rose to 138,000t, more than doubling from April, while exports of processed palm oil and oleochemicals edged up by 3pc on the month to 2mn t.
But biodiesel exports fell to just 8,000t, down from 24,000t in April and 21,000t in May 2022, with continuing investigations from the International Sustainability and Carbon Certification and some European authorities into Asian suppliers possibly stemming biodiesel flow from Indonesia to its usual key buyer China.
Total domestic palm oil consumption rose by 2.9pc on the year, but fell by 4.2pc on the month to 1.82mn t in May.
