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Palm Oil is the Strategic Issue



Palm Oil is the Strategic Issue

InfoSAWIT, JAKARTA – CPO and its derivatives demands keep increasing in the global markets. It is part of the good healthy product and environment that the people consume.

Though some sides reject CPO but the global makes palm oil as the ‘primadona’. This is the main indicator for the government of Indonesia that palm oil is the economic progress nationally.

This happens for most of the economic providers derive from non-oil and gas sector and dominated by CPO and the derivative exports. In every single year, more than US$ 16 billion, the exchange of Indonesia derives from the two. The big potential of CPO and its derivatives really support the development nationally.

 

The Sustainability of Export

For it is still export oriented, palm oil from Indonesia keeps facing the trade barriers. Social and environmental issues are always the main ones to CPO trades. Let us say European Union that always questions the CPO production though Indonesia has implemented Indonesian Sustainable Palm Oil (ISPO) mandatorily and Roundtable on Sustainable Palm Oil (RSPO) voluntarily.

ISPO and RSPO that strengthen CPO and its derivatives sustainably never stir the policy makers to loosen the trade regulations to European Union, starting from the tariff to non-tariff. These block CPO and its derivatives exports to the continent.

Actually such issues from European Union are not the main things in palm oil trades but it is about protection to millions of soybean farmers. Million soybean producers are afraid of if palm oil is freely sold in European Union.

The main factor of ‘afraid of palm oil’ has become the old and deeper discussion in the soybean producers because from the productivity, palm oil could produce 10 times more than it in every single hectare. This is the main reason for them in the continent.

More than 80% of palm oil could be used to food products and the derivatives. Since 1990s it has been used in many food and derivative industries including in European Union and since 2006, palm oil production globally defeats soybean production in the world.

Since USDA published its statement in 2005 saying that palm oil and its derivative are safe for the health, the food derivative industries sustainably use palm oil as the alternative material.

Ever since, soybean oil faces the bad situation. Slowly but surely the soybean never gets the new price because of deficit harvest. On the other hand CPO and its derivative products which are ‘relatively cheap’ have the new image in the international markets, including in European Union.

The vegetable oil market constellation which always competes to supply the oil food drastically changes. After the crude oil got more expensive globally the vegetable oil producer countries use vegetable oil as the material to produce fuel. As the result, palm oil becomes the ‘primadona’ as the fuel material globally.

Why does it happen? The CPO and its derivative products are competitive in the carbon chain In the simple chemical structure, palm oil has the most complete and the most special carbon chain of other vegetable oil. That is why palm oil is the ‘primadona’ to food and non-food oil.

 


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