JAKARTA – The Indonesian Palm Oil Association (Gapki) said that around 80 percent of Indonesia’s palm oil exports are products of downstream palm oil industries and only 20 percent as raw materials or unprocessed crude palm oil (CPO).
Gapki Chairman Joko Supriyono said that the processed palm oil products consist of olein, refined, bleached, deodorized (RBD) fractions, RBD stearin, oleochemical, and biodiesel. The processed products indicate that the downstream palm oil industries have been robustly growing. “Last year, from the total palm oil exports of 34 million tons, only 7.0 million tons were crude palm oil (CPO). Last year oleochemical export increased by 20 percent and domestic absorption rose by 60 percent due to the increase of demand for hygiene and health products,” he said during a meeting with media leaders and editors in Jakarta recently.
Based on data from Gapki, palm oil exports in 2017 reached 33.72 million tons, of which CPO export was only 7.08 million tons (20.99%), in 2018 the palm oil exports amounted to 36.33 million tons, of which CPO export was only 6.55 million tons (18.03%).
In 2019, the palm oil exports reached 37.43, of which CPO export was 7.39 million tons (19.74%), and in 2020 the palm oil exports reached 34.01 million tons with CPO export being 7.17 million tons (21.08%). In 2020, the total value of palm oil exports reached US$22.97 billion as compared to US$ 20.22 billion in 2019.
He noted that the downstream palm oil industries should be further developed to create further value added and new job opportunities. “But of course, development of downstream industries depend on financing and the market demand,” he said.
Joko pointed out that all products of downstream industries will end up in the market and decided by the market. “Take the example of oleochemical products. Actually, the eleochemical product is facing a very tight competition at the export market, and even it has a tendency of oversupply. But as demand for the product is rising, then it has been absorbed in large amount. So is the biodiesel. But the biodiesel is also fully supported by the government’s mandatory biofuel program to produce biodiesel 30% (B30).
“The government had initially planned to upgrade the biodiesel program from B30 to B40 this year, but due to technical consideration and funding program the B40 program has yet to be discussed further before being realized,” said Joko.
Gapki Third Deputy Chairman Togar Sitanggang said that the Association of Indonesian Automotive Manufacturers (Gaikindo) opined that the production of B30 with the mixture of fatty acid methyl ester (FAME) from CPO that is used for motor vehicles should be only up to B30. If it is upgraded to B40 it should be produced with a mixture of Diesel 100 (D100) or greendiesel, which is 100 percent produced from palm oil by Pertamina with price higher than that of the FAME-based biodiesel.
“It is still under discussions. But considering that Indonesia is the world’s largest producer of palm oil, there will be no problem with the production of biodiesel up to B50,” Togar said. (*)
Source: Investor Daily
