Indonesia palm oil production forecast to increase in 2019/20 on area expansion

The US Department of Agriculture (USDA) said it was forecasting Indonesia’s 2019/20 palm oil production at 43.0 million tons, up 1.5 million (4 percent) from last year.

The year-to-year production increase is attributed mainly to area expansion as yield is expected to be slightly down from 2018/19, it said in its latest sector report.

“Mature palm area is forecast at 11.8 million hectares, up 4 percent from 2018/19. Annual yield growth has been significant following the 2015/16 El Niño event where dry weather negatively impacted yields in both Sumatra and Kalimantan–yield from 2015/16 to 2018/19 increased by 17 percent,” the reports said.

Yield for 2019/20, however, is forecast at 3.66 tons per hectare down, slightly from last year due to a significant decline in crude palm oil prices during the last quarter of 2018/19 as both large- and small-holder plantations reduced fertilizer applications.

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