REPUBLIKA.CO.ID, YOGYAKARTA -- Indonesia begins to cut exports of crude palm oil (CPO) on shrinking production and growing domestic requirement to feed the country's bio-diesel industry.

The weather phenomenon El Nino has resulted in a decline in the country's production of palm oil.

The country's production of palm oil fell 6.4 percent to 2.31 million tons in March from 2.47 million tons in February.

The decline in production forced the government to give more attention to maintaining stability in domestic supply and stocks.

Executive Director of the Indonesian Association of Palm Oil Companies (GAPKI)Fadhil Hasan said the country's exports of palm oil fell 24 percent to 1.74 million tons in March from 2.29 million tons in February.

In March 2016, the country's production of palm oil based biodiesel reached 270,000 kiloliters with domestic consumption of 200,000 kl.

The domestic consumption of bio-diesel in March 2016 fell 32 percent from 294,000 kl in the same period last year.

Based on data at GAPKI, biodiesel consumption in the country in the first quarter of 23016 totaled 732,000 kl.

"With the consistency recorded in the domestic consumption, GAPKI is optimistic consumption target of 3 million kl this year would be reached," Fadhil said.

The country's stock of palm oil, bio-diesel and oleo-chemicals totaled 3.02 million tons in March down 12 percent from 3.44 million tons in the previous month.

Year-on-year, exports of palm oil rose to 6.14 million tons in the first quarter of this year from 5.6 million tons in the same period last year.

In March 2016 , exports were cut to all countries of destination excepting to India and Middle East countries.

Exports to the United States plunged 84 percent from 74,680 tons to 12,240 tons, partly on large stock of soybean in that country.

Exports in March fell by 53 percent to African countries, by 46 percent to Bangladesh, by 31 percent to Pakistan, by 30 percent to China and by 13 percent to the European Union.

The decline in imports by those countries followed an increase in the price of that commodity and economic slump such as in Pakistan and Bangladesh.

GAPKI predicted that the CPO price would pick up in the global market to reach US$690 - US$730 per ton by the end of April.

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