The Challenges behind the High Exports of Palm oil from Indonesia

The Challenges behind the High Exports of Palm oil from Indonesia

InfoSAWIT, JAKARTA - Do you know Elaeis guineensis? It is Latine language which means palm oil. It has become the ‘primadona’ of plantation in Indonesia ever since the colonialism era.

In 1960s this commodity was massively developed or in the era of President Soeharto within his ‘Rencana Pembangunan Lima Tahun (Repelita)’ program. As time goes, PT Perkebunan Nusantara belonging to the government was made in 1970s and the smallholders developed after 1979.

According to Indonesian Palm Oil Association (IPOA), palm oil industries have good progress and work. This is known from the production noted by IPOA. The crude palm oil (CPO) production in 2017 reached 38,17 million tons and the palm kernel oil (PKO) reached 3,05 million tons. So the total production reached 41,98 million tons.

The numbers increased 18% if compared to those in 2016 that reached 35,57 million tons that consisted of CPO reaching 32,52 million tons and PKO reaching 3,05 million tons while the palm oil plantations in Indonesia could be about 14,03 million hectares.

In 2017 the palm oil exports, such as, CPO and its derivatives (not biodiesel and oleochemical) significantly increased 23% or from 25,11 million tons in 2016 to be 31,05 million tons. So palm oil is in the top ten of exchange provider in this country.

Still in 2017, the palm oil exports reached US$ 2,97 billion or increased about 26% compared to those in 2016 that reached US$ 18,22 billion. The palm oil exports in 2017 hit the peak that the plantations could achieve in Indonesia.

Unfortunately the palm oil trade in the world does not run well. For example, the trade barrier from India that runs expensive incoming tax. But the exports to European countries increased up to 5,03 million tons or  higher than the exports in 2016 that reached 4,37 million tons.

European still makes black campaigns, and palm oil ban for biodiesel in the form of Resolution. According to the countries, palm oil makes lots of issues, such as, deforestation, corruption, children labor, and human rights violation. The government of Indonesia directly responded the cases by pro actively socializing the production to the citizens of European. It is belived that it is the best way to maintain the existence of palm oil plantations in Indonesia.

The black campaigns are not from European only but also from the United States of America which runs anti-dumping campaign for biodiesel from Indonesia. But Indonesia still maintains the quality and its existence. It is proven that the palm oil demands from American countries increased. In 2017 Indonesia exported palm oil up to 1,18 million tons. The numbers increased 9% compared to the 2016 demands.that reached 1,08 million tons.(Nadyla Rizka Nur Amelia – Majoring Agribusiness, Faculty of Agriculture, 2015, Universitas Padjadjaran)


For more, please read InfoSAWIT, January 2019


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