By Yoga Rusmana and Naila Firdausi Dec. 10 (Bloomberg) -- Indonesia’s exports of crude palm oil and other products from oil palm plantations may drop 31 percent in the last quarter of this year as lower prices force buyers to default on purchase orders. Exports of products derived from palm fruits and kernels may fall to 2.66 million metric tons in the three months to Dec. 31, from 3.86 million tons in the same period last year, according to estimates given today by Sahat Sinaga, executive director at the Indonesian Confederation of Vegetable Industries, or Gimni. Indonesia in October scrapped a levy on palm oil exports as local currencies and commodity prices plunged. Palm oil futures in Malaysia have lost 25 percent since Oct. 1 after declining 42 percent in the July-September period, the biggest quarterly drop since 1995, as supply outstrips demand. “Many buyers who entered into contracts in August-September for delivery this quarter have defaulted,” Sinaga said today in a phone interview. Overseas buyers canceled or defaulted on at least 200,000 tons of orders, he said. Indonesia, the world’s biggest palm oil producer, shipped 10.91 million tons of palm products in the nine months through September, from 9.33 million tons a year earlier, the data showed. The following table shows export volume for oil palm products, in metric tons. Jan.-September October-December Type of oils 2008 2007 2008(Est) 2007 -------------------------------------------------------------- Fruit-derived Crude palm oil 5,226,060 4,143,511 1,242,345 1,834,299 RBD Palm olein 2,563,176 2,332,111 543,782 872,993 Bio diesel 385,055 161,333 118,743 89,717 Palm derivatives 1,772,790 1,688,558 435,766 701,818 Kernel-derived Crude lauric 743,038 777,238 232,400 279,650 Kernel derivatives 215,204 226,880 85,430 82,528 --------------------------------------------------------------- Total 10,905,323 9,329,631 2,658,466 3,861,005 --------------------------------------------------------------- Note: Palm derivatives export figures show total shipments for palm fatty acid distillate and refined, bleached and deodorized palm oil and palm stearin. Crude lauric refers to crude palm kernel oil, while kernel derivatives export figures show total shipments of palm kernel stearin, palm kernel olein and other derivatives. Figures for October through December of 2008 are estimates. To contact the reporters on this story: Naila Firdausi in Jakarta at nfirdausi@bloomberg.net; Yoga Rusmana in Jakarta at yrusmana@bloomberg.net.

Source