Dani Commodities' report on agri commodities
As per the latest crop estimates by United Sates Department of Agriculture (USDA) stated that the currently forecast 2012/13 palm oil production in Indonesia at 28.5 million tons. Production will further increase to 31 million tons in the next marketing year (2013/14). Planting area expansion is still playing a pivotal role in Indonesian palm oil production growth. Post anticipates that the 2011-2013 forest moratoriums, which has been extended to May 2015, and land use disputes will not ease oil palm area expansion based on the following indications:
Robust oil palm seed sales performance. Oil palm breeders were able to sell 163 million seeds in 2012, and they set a sales target of 162 million seeds in 2013. Strong sales growth of oil palm seeds indicates that Indonesia palm oil sector is still able to open a sizable new planting area. Oil palm seed demand comes from two main activities i.e. new planting and replanting to replace old and/or bad crops.
According to Central Statistical Agency data, replanting rate in Indonesia stands at around 100,000 hectares per year. One hectare of oil palm plantation requires 200 seeds. A 2012 seed sales data at 163 million seeds minus replanting rate of 100,000 hectares per year suggests that Indonesia will open 715,000 hectares new oil palm area in 2013. Consumption To Decline On Weak Biofuel Demand.
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