Ministry of Industry Encouraged Palm Oil Downstream Sectors to Achieve National Economic Balance

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Putu Juli Ardika, General Director of Agro-Industry at the Ministry of Industry. Photo by: Special

PALMOILMAGAZINE, JAKARTA – The Ministry of Industry continues to advance Indonesia’s palm oil sector as a key economic cornerstone. This sector supports 4.2 million workers and sustains the livelihoods of 20.8 million Indonesians.

Additionally, it contributes approximately Rp 450 trillion annually to the economy through value-added downstream palm oil products.

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Putu Juli Ardika, General Director of Agro-Industry at the Ministry of Industry, projects that the economic impact from the palm oil downstream sector could surpass Rp 750 trillion annually. This figure equates to 3.5% of Indonesia’s gross domestic product (GDP) in 2023, which totaled Rp 20,892 trillion.

Also Read: PFMA Director: Downstream Sectors Key to Overcoming Future Challenges

Speaking at a discussion themed “Strategi Lanjutan Akselerasi Hilirisasi CPO,” he emphasized the importance of enhancing downstream strategies to increase the value-added of palm oil products in the country.

Furthermore, the Ministry of Industry underscores the pivotal role of palm oil and its derivatives in Indonesia’s national trade balance. Beyond its economic significance, these industries foster regional economic growth and contribute to the stability of the Indonesian rupiah exchange rate.

Just like what President Joko Widodo ordered, Ministry of Industry decided palm oil downstream industries as the national – scale priority as it is written on the President’s Regulation Number 74 / 2022 about 2020 – 2024 National Industrial Policy. These include fiscal and non-fiscal incentive and out fee export tarif reduction, to support downstream sectors in this country.

Ministry of Industry noted two significant miliestone to realize palm oil downstream industries. The first is out fee tariff – restructurisation in 2011 and fiscal combination policy through Crude palm oil supporting fund that Palm Oil Plantation Fund Management Agency (PFMA) manages, and biodiesel mandatory (B35) program.

The second, the policy also accelerated to develop downstream industries and support supply and demand management by maintaining the profitable price for smallholders.

It means, Ministry of Industry keeps being committed to develop palm oil industries as the back-bone of economy nationally by realizing sustainable downstream sectors and would be oriented to escalate additional value for this country.

“In the two milestones, palm oil downstream sector development would be more accelerated and getting the direction to manage supply and demands by maintaining fresh fruit bunch price in the remunerative level for smallholders,” Putu said, as in the official statement to, Monday (24/6/2024). (P2)

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