Time to Maintain the Balance of Supply and Markets

Time to Maintain the Balance of Supply and Markets

InfoSAWIT, JAKARTA - It is unavoidable that the CPO selling price keeps decreasing because the CPO from Indonesia depends on the global demands. In addition some goal export countries tend to resist the CPO demand.

The resistance appears from the CPO and its derivative trade barriers, starting from the tariff and non-tariff that comes over and over again.

On the other hand the domestic markets that should absorb the maximal CPO production nationally are not as what it is hoped and its productions tend to increase in every single year. This makes over-supply and the competition with the other kinds of vegetable oil. As the result, the CPO price is not too good in the international trade.

The cheap CPO price is the boomerang to develop the palm oil industries nationally. It is not only potential to disturb the business management, but also could damage the nursery and the trees themselves. One the other hand, the market demands on sustainable palm oil keeps increasing as same as the increasing population in the world.

As the description, in the July acceptance 2019, the CPO was so cheap up to RM 1983 or about US$ 475 per ton within the currency, US$ 1 =  RM 4,17. It was part of negative sentiment in the trade war of USA and China by making tax exports for China’s products in USA.

The cheap CPO blocks many activities in the plantations, such as, the lack of income for the growers (planters). As the result, their fresh fruit bunch (FFB) harvests decrease in the future days.

The plantation owners, both the smallholders and the stakeholders, do not do many as their routine. The nursery that spends lots of money should be abandoned when the CPO gets cheaper.

Maintaining the palm oil markets, and making new chances to sell to other countries are the keys to succeed palm oil trade in Indonesia, and also by making promotion to the global markets, and the supports from the government of Indonesia. (Editorial, InfoSAWIT, August 2019)



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