InfoSAWIT, JAKARTA - The cheaper FFB produced by the smallholders always makes lives issues for the people who depend on palm oil plantation nationally. Most of the villagers in the late days depend on palm oil cultivation in many regions in Indonesia.
The plantation development may make social and environmental issues. But the plantations really contribute to the welfare the social and environment. Most of the issues could be solved to be equal with the two.
So the people’s needs on the palm sustainable palm oil plantation are the successful keys from the development in one region. Though there are many challenges to face, the plantations would improve and innovate within the equal technology according to the social and environmental needs.
The big issue to face is the cheap FFB. It hits the smallholders and the companies nationally. In some palm oil centers, the FFB does not make profits for the plantations. Here are 4 issues in palm oil to accomplish:
The first is the production cost. In every single year, the costs to produce CPO get more expensive. But after 2014 the harvest selling price gets cheaper. Though the additional burden from CPO Supporting Fund (CSF) has been eliminated, it could not make the FFB more expensive up to the economic value. Actually the CSF should not influence the CPO selling price but it multiplies the CPO production costs.
The second is the main regulation about CPO selling price should refer to the numbers of demand of CPO and its derivative. For the economy is globally stagnant and tends to decrease, it makes the consumers decrease the demands on kinds of vegetable oil, including palm oil. As the result, the CPO selling price gets cheaper.
(This article was published in InfoSAWIT, June 2019)