PALMOILMAGAZINE, JAKARTA – The policy to develop the palm oil downstream sector, implemented under the direction of President Joko Widodo, has effectively reduced Indonesia’s economic dependence on global commodity prices. Recent data shows that exports of palm oil and its derivatives reached $28.45 billion in 2023, accounting for 11.6% of the total non-oil and gas exports.
The export ratio of raw materials (crude palm oil/crude palm kernel oil or CPO/CPKO) to processed palm oil demonstrates significant progress, standing at 10.25% to 89.75%.
The palm oil industry has become a vital sector for employment, providing jobs for approximately 16.2 million direct and indirect workers. Strengthening downstream sectors is crucial to addressing national economic challenges, particularly in tackling the middle-income trap.
In the second quarter of 2024, Indonesia’s gross domestic product (GDP) reached Rp 5.536 trillion, with palm oil processed products and their derivatives contributing 3.5% to the GDP. “This indicates that the economic value of the palm oil sector in the second quarter of 2024 amounted to Rp 193 trillion,” said Minister of Industry Agus Gumiwang Kartasasmita in an official statement quoted by Palmoilmagazine.com on Friday (10/11). He also predicted that by the end of 2024, the economic contribution from palm oil could reach Rp 775 trillion annually.
With its abundant natural resources and large market, Indonesia has significant potential to emerge as a leading global player. Agus emphasized the importance of synergy among stakeholders in formulating industrial policies, enhancing trade, reinforcing supply chains, developing human resources, and advancing research and technology.
“By realizing these, we do hope that national scale industries, namely palm oil would really be the strong pillar of economy nationally. These sectors would play the roles not only in short term – economic progress but also to realize the inclusive, productive, and sustainable economic development target,” Agus said.
Palm oil downstream sectors, if they would be successful, would escalate the derivative products, reinforce the position of Indonesia in the global – scale trade. The policy to increase palm oil additional value would help not only to solve the global – scale challenges, but also would significantly contribute to the economic stability in this country namely to face the external pressures, such as, in the pandemic, and uncertain geo-politic situation.
Indonesia would keep doing its best to increase palm oil use in this country, namely in biodiesel program. after being successful in B30 implementation, the government is now preparing the implementation of B40 and even it is hoped to realize B100 in the future to minimize fossil fuel dependence.
By the strategic things, Indonesia would be optimist to reinforce its domestic industries namely in palm oil sectors, and maintain the economic stability in the global scale – challenges. (P2)
