Thanks To Oil Palm, Indonesia’s Remote Areas Developing

Jakarta – The palm oil commodity is the largest contributor of foreign exchange to Indonesia. It has become the mainstay in absorbing workers and generating economic growth.

The Indonesian Palm Oil Association (GAPKI) Communication Division Head  Tofan Mahdi said that due to the palm oil industry the remote areas in Indonesia have become very developed ones.

“The areas that are very far from the city centers have been developing and some newly-established regional polities, such as those in Sulawesi, are the result of oil palm plantation development,” Tofan said during a virtual discussion last week.

He noted that Indonesia is the world’s largest producer of palm oil with total production reaching 52 million tons per year, followed by Malaysia with a total production of around 22 million tons.

“If Indonesia wants to become a developed country, it has no choice but to continually develop the palm oil industry,” he said.

The palm oil industry is clearly the engine of national economic growth. The industry employs around 4.3 million people.

Tofan said that there are around 3,500 palm oil companies operating in Indonesia, of which 750 companies are members of GAPKI. There are also around 4.6 million smallholders who control around 41 percent of oil palm plantations in Indonesia.

“When the palm oil industries are growing, then we can conclude that a large number of Indonesian people have become prosperous.  It is particularly seen right now when the price of palm oil already reached US$760 – US$800 per ton,” he said.

The rising trend of palm oil price was also the result of palm oil companies’ efforts to continually comply with the health protocol during the Covid-19 pandemic, so that the oil palm plantations can continue their operation and production as expected to meet the market need. (*)