PALMOILMAGAZINE, JAKARTA – Indonesia’s economy has been buoyed by industries rooted in its natural resources, spanning timber, mining, natural gas, fisheries, and plantations. Within the plantation sector, a transition has taken place, with commodities like rubber, cloves, cocoa, coconut, and coffee being supplanted by palm oil. The palm oil industry has experienced significant expansion over the years, witnessing remarkable growth from a mere 294.5 thousand hectares in 1980 to a substantial 15.1 million hectares by 2021. This expansive development mirrors the substantial production of crude palm oil (CPO), which reached an impressive 49.7 million tons.
In 1980 palm oil plantations were dominated by government that reached 68 percent but as time went by, the mastery got shift by the private sectors and the smallholders that reached 56 percent and 40 percent for each. The government’s plantation just reached 4 percent in 2021.
Data from United States Department of Agriculture that Palm Oil Agribusiness Strategic Policy Institute (PASPI) published in 2023, in the global level, palm oil plantations were lower than three kinds of vegetable oils in the world. Palm oil plantations laid about 25,06 million hectares while soyoil, rapeseed, and sunflower plantations laid about 129,9 million hectares, 37,8 million hectares, and 28,4 million hectares for each.
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From the width, the last three commodities are contra with their productivity. Palm oil could produce 3,36 tons per hectare per year; sunflower oil could produce 0,78 – 3,36 tons per hectare per year; rapeseed could produce 0,74 – 3,36 tons per hectare per year; and soyoil could only produce 0,47 – 3,36 tons per hectare per year. It means, palm oil is the most efficient in area planting of all vegetable oils. (IUCN, 2018).
Palm oil industrial development which is fast put Indonesia to master 59 percent of vegetable oil production in the world while Malaysia just masters 25 percent. It is no doubt that Indonesia is the main competitor for other countries that produce vegetable oils (soybean oil), rapeseed (canola), and sunflower oil).
Indonesia and Malaysia lift up vegetable oil competition in the globe and get more dynamic, not only about price competition but also the shift in non-price competition. If it is carefully observed, non – price competition is about dominant issues the most. It is assumed that the issues (non-price competition) have been spoken out loud to the public, which are, the environment, deforestation, economy, and health.
