With respect to Malaysia, Indonesia has recorded a steady increase in its export market share in the world market. However, Malaysia has recorded a
decline in the overall market share in the world market. It was only in 1998 that it recorded an increase in its export competitiveness while the rest of the period it
registered a decline in the export competitiveness based on its export competitiveness index.
There are also other CPO exporting countries in the world alongside Indonesia and Malaysia. Some of these countries have registered an increase in
export market share in the world market. The market share of Hong Kong fluctuates and it registered an increase in the years 2000, 2001 and 2002 while the
rest of the period, it recorded declining export competitiveness index meaning a decline in export market share of its CPO.
6.1 Indonesian Crude Palm Oil Export Market
India is the most important market for Indonesian CPO. Indonesia has strong CPO exporter to this market and has acquired the higher percentage of its
CPO market in India. It was found as reported in Table 17, that in 2004, Indonesia exported about 2.5 million tons of CPO to India compared to about one million of
Malaysian CPO. In 2005, its market share increased in India to about 2.6 million tons of CPO as compared to that of Malaysian that reduced to about 0.7 million
tons. The Indonesian export of CPO to India has been on an increasing trend while that of Malaysia has been on the decline.
The other important market for Indonesian palm oil is China. With regard to CPO, Indonesian exports to the Chinese market have been on an upward trend.
The volume exported has been lower as compared to that of Malaysia. In the year
2004, Indonesia exported to China about 1.15 million ton of CPO compared to that of Malaysia that was about 2.6 million tons the same year. In 2005,
Indonesian CPO export to Chinese market increased to about 1.4 million tons while at the same time, Malaysian had its export increased to 2.9 million tons the
same year.
Table 17. Indian and Chinese Crude Palm Oil Imports by Country of Origin Year 2004 - 2006
India imports 000’ tons China imports 000 tons
Country 2004 2005
2006 2004
2005 2006
Indonesia 2496.0 2647.9
2622.2 1146.8
1372.3 1934.1
Malaysia 949.0 664.0
519.5 2578.4
2904.0 3454.0
Singapore 0.5 1.7
5.9 n.d
n.d n.d
Thailand 2.0 0.8
0.5 15.2
7.1 4.8
Hong Kong n.d
n.d n.d
108.0 35.0
n.d
Other Countries 5.4
0.8 0.6
2.1 1.6
53.2
Total 3198.4 3315.1
3452.9 3850.6
4320.0 5461.7
Source: Oil World, 2007. Note: n.d - indicate no data available
Considering the strength of CPO export into the India CPO market, Indonesia has dominated the market over the years. It was realized that in the year
2004, Indonesia exported about 72 percent
of all the CPO into the India CPO market. This volume of CPO export from Indonesia continued to rise and in 2005,
Indonesia exported 79.87
percent
to India while in 2006, it had 81.98 percent of India’s CPO import. This was very high as compared to Malaysian CPO export
that was recorded as 27.48
percent
, 20.03
percent
and 16.24
percent
in the year 2004, 2005 and 2006 respectively.
Further results showed that the share of Indonesian export into the Chinese CPO market continued to increase steadily with time unlike that of Malaysia. The
market share of Indonesian CPO export was recorded as 29.79 percent in 2004. This increased to 31.77 percent and 35.42 percent in the year 2005 and 2006
respectively. That showed an upward increase in the market share of Indonesian CPO in the China market. However, the market share of Malaysian CPO in
Chinese CPO export market decreased from 67.22 percent in 2005 to 63.24 percent in 2006 as indicated in the Table 18 for the two CPO markets.
Table 18. Percentage of Crude Palm Oil Imported by Country of Origin, Year 2004 - 2006
India Market China Market
Country 2004 2005 2006 2004 2005 2006
Indonesia 72.29 79.87 81.98 29.79 31.77 35.42
Malaysia 27.48 20.03 16.24 66.97 67.22 63.24
Singapore 0.01
0.05 0.18
n.d n.d
n.d Thailand
0.06 0.02
1.57 0.39
0.16 0.37
Hong Kong n.d
n.d n.d
2.80 0.81
n.d Other Countries
0.16 0.03
0.03 0.05
0.04 0.97
Total 100 100 100 100 100 100
Source: Oil World, 2007. Note: n.d - indicate no data available
With regard to vegetable oils, India has recorded a decrease in its imports of palm oil over the years. Although its import of palm oil has reduced, palm oil is
still a very important vegetable oil product for India. In the year 2004, India imported about 3.5 million tons of CPO which reduced to 3.3 and 3.2 million tons
of CPO in 2005 and 2006 respectively as in Table 19.
Table 19. Vegetable Oil Import by India in the Year 2004-2006 Volume of imports in 000’ tons Percent
Vegetable Oil 2004
2005 2006
2004 2005
2006
Soybean oil 1125.7
1925.7 1626.4
23.59 35.43
31.73 Sunflower oil
60.8 17.0
124.6 1.27
0.32 2.43
Palm oil 3452.9
3315.1 3198.4
72.35 61.00
62.41 Palm kernel oil
109.8 152.2
153.5 2.30
2.80 3.00
Coconut oil 23.3
24.6 22.3
0.49 0.45
0.43
Total 4772.5
5434.7 5125.1
100 100
100
Source: Oil World, 2007.
Of the total imports, palm oil imports accounted for 72.35 percent in 2004, 61 percent in 2005 and 62 percent in 2006. Soybean oil was reported to be on the
increase with time as an import product in India alongside palm oil. During the same period, import of soybean oil increased from 1.1 million in 2004 to 1.9
million in 2005. The import of Soybean then reduced in the year 2006 to 1.6 million tons. It was revealed from the study that palm oil imports contributed to
72.35 percent of vegetable oil imports in the year 2004. There was reduction in import of CPO in the next period where only 61 percent of total vegetable oil was
imported as palm oil in 2005 while in the year 2006, only 62.41 percent accounted for palm oil imports. It was also found out that soybean accounted for 23.59
percent, 35.43 percent and 31.73 percent of the total Indian vegetable oil imports in the year 2004, 2005 and 2006 respectively. The other vegetable oils imported
into India market accounted for about 5 percent average on the entire period.
6.2 Competitiveness of Indonesian Crude Palm Oil in world Market
