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USDA Foreign Agricultural Service GAIN Report

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Required Report - public distribution Date: 9/6/2005 GAIN Report Number: ID5020 ID5020 Indonesia Oilseeds and Products Palm Oil Update 2005

Approved by: Fred Kessel U.S. Embassy, Indonesia Prepared by: Chris Rittgers

Report Highlights: Production, exports, and domestic use estimates have been revised upward. Final 2003/04 data were increased based on newly collected information, and 2004/05 estimates were increased to reflect the pace of exports and production to data. With this higher baseline, the S&D forecasts for 2005/06 were similarly increased.

Includes PSD Changes: Yes Includes Trade Matrix: No Semi-Annual Report Jakarta [ID1] [ID] GAIN Report - ID5020 Page 2 of 4

TABLE OF CONTENTS

I. SITUATION AND OUTLOOK...... 3

PRODUCTION AND TRADE...... 3 II. STATISTICAL INFORMATION AND TABLES...... 4

TABLE 1: PRODUCTION, SUPPLY AND DEMAND: OIL, PALM...... 4

UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - ID5020 Page 3 of 4

I. SITUATION AND OUTLOOK

Production and Trade

Based on realized exports, domestic use estimates, and final data collected from industry sources, palm oil output for 2003/04 has been revised upward to 12 million tons, and exports to 8.3 million tons.

Growth in output and exports has continued to be very strong in 2005, with expectations that final output will be 10 percent higher than the previous year. Performance in the sector over the first three-quarters of the year has confirmed earlier predictions that the tsunami would have no negative impact on production nor exports. Growing conditions in the provinces of Riau and North Sumatra, which account for nearly 40 percent of production, continue to be ideal. In addition, newly productive plantations in Kalimantan are providing additional output.

At the same time, demand from traditional overseas buyers has been strong. Average monthly exports during the first part of the year approached 800,000 tons. Furthermore, the recent weakening of the rupiah could provide an additional competitive edge to Indonesian palm oil on the world market should the currency remain at current levels for an extended period of time.

As a result of the market fundamentals outlined above, 2004/05 production and exports are now estimated at 13.2 million and 9.2 million respectively. In keeping with expectations that the sector will continue expanding, albeit at a slower pace, the forecasts for 2005/06 were increased accordingly.

UNCLASSIFIED USDA Foreign Agricultural Service GAIN Report - ID5020 Page 4 of 4

II. STATISTICAL INFORMATION AND TABLES

Table 1: Production, Supply and demand: Oil, Palm

PSD Table Country Indonesia Commodity Oil, Palm (1000 HA)(1000 TREES)(1000 MT) 2003 Revised 2004 Estimate 2005 Forecast USDA Official Post USDA Post Post [Old] Estimate[New] Official [Old] Estimate[New] USDA Official [Old] Estimate[New] Market Year Begin 10/2003 10/2004 10/2005 Area Planted 0 5000 0 5300 0 5700 Area Harvested 0 4125 0 4370 0 4700 Trees 0 575000 0 609500 0 655500 Beginning Stocks 414 414 370 466 490 436 Production 10600 12000 11600 13200 12600 13800 MY Imports 20 12 25 25 25 12 MY Imp. from U.S. 0 0 0 0 0 0 MY Imp. from the EC 0 0 0 0 0 0 TOTAL SUPPLY 11034 12426 11995 13691 13115 14248 MY Exports 7856 8300 8100 9200 9000 9600 MY Exp. to the EC 1224 1100 1650 1650 1650 1300 Industrial Dom. Consum 300 300 385 385 475 400 Food Use Dom. Consump. 2450 3300 2950 3600 3045 3700 Feed Waste Consumption 58 60 70 70 95 60 TOTAL Dom. Consumption 2808 3660 3405 4055 3615 4160 Ending Stocks 370 466 490 436 500 488 TOTAL DISTRIBUTION 11034 12426 11995 13691 13115 14248 Calendar Year Imports 0 0 0 0 0 0 Calendar Yr Imp. U.S. 0 0 0 0 0 0 Calendar Year Exports 0 8300 0 0 0 0 Calndr Yr Exp. to U.S. 0 0 0 0 0 0

UNCLASSIFIED USDA Foreign Agricultural Service