China to Purchase More Indonesian Palm Oil

Chinese Premier Li Keqiang said at a China-Indonesia business summit recently that his country will buy 500,000 tons more of palm oil annually.  Boosting palm oil imports was aimed at helping smallholder farmers in Indonesia, Li said.  China is one of the top buyers of Indonesian palm oil accounting for around 12% of Indonesian palm oil exports.  

The expected higher demand from China could counter a potential fall in Indonesia’s export to the EU states.  It will be recalled that in January this year, the European Parliament had approved a number of draft measures to meet climate goals, which included a ban on the use of palm oil in motor fuels from 2021.  

Late last month, the Indonesia Palm Oil Association had already expected local palm oil exports to China to rise, since China had introduced higher tariffs on soybeans from the US.  Indonesia’s palm oil exports to China had been on a steady rise recently.  Last year, palm oil export by Indonesia alone was 3.73 million tons.  This is more than 70% of palm oil consumption in China of 5 million tons and an improvement from prior year total at 3.23 million tons.