Change the Mindset of Palm Oil Industries in the Pandemic from Plantation to Processing Business.

Change the Mindset of Palm Oil Industries in the Pandemic from Plantation to Processing Business.

InfoSAWIT, JAKARTA – In the corona virus (Covid-19) pandemic which infects many people around the world keeps decreasing the economy globally and changes the production and competition maps of the vegetable oil industries.

Not only the soybean production as the mainstay commodity in the western countries where the pandemic hits, crude palm oil (CPO) which has dominated the vegetable oil markets in the world hits the impacts too.

But as the competitive vegetable oil, CPO is better than other kinds, such as, soybean oil, sunflower oil, and rapeseed oil.

To maintain the strategic commodity competitive, every stakeholder in palm oil industries should cooperate to the domestic absorption and encourage the export in the same time.

Furthermore 41% of palm oil plantation ownerships belong to the people, 54,8% belong to big private palm oil companies and the government has 4,3%.

Riau was the first province having the widest palm oil plantations covering 2,80 million hectares (ha) in 2019, or about 19% of the total palm oil plantations in Indonesia and the second and third were West Kalimantan covering about 1,86 million ha and Central Kalimantan covering about 1,68 million ha. 

The productivity tends to be in fluctuation for years but relatively increased in 2014-2020 within the average increasing about 0,37% per year.

“The government and the big private companies contribute to increase the palm oil productivity in Indonesia. In the contrary, the people’s plantations produce less,” Former Chairman of Watimpres, Prof. Sri Adiningsih said in webinar held by Forum Jurnalis Sawit (FJS) within the theme “Mendongkrak Pasar Domestik dan Ekspor Minyak Sawit Indonesia”, Wednesday (22/7/2020) that InfoSAWIT joined.

It needs to increase the people’s productivity by implementing the smallholders’ replanting program within the mechanism system that might be minimally implemented in Indonesia.

The foreign trade level showed that the palm oil exports positively contributed to the national income and exchange though the volume and values decreased in 2016. But they tend to increase in one last decade.

in 2018, 65% of the total CPO production in Indonesia were exported and the rests were consumed in the domestic. “The palm oil export value and its contribution are much higher than other strategic commodities. It means that the palm oil industries nationally relatively have surplus to other strategic industries,” she who is now as the Commissioner of Indosat Ooredoo, said.

In the pandemic, she continued, it needs to transform palm oil industries because it is in the new normal era – after pandemic and eventually change the economy and life style in the world.

It needs to change the mindset of palm oil from the plantation business to processing industries, including in the bio-energy sector for it is the future business. “Indonesia is potential to be the biggest bio-energy producer in the world but it needs to get the DMO formula and competitive and interesting cap pricing,” she said. (T2)


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