JAKARTA – Palm oil is the most strategic commodity for Indonesia as the world’s largest producer and exporter of palm oil. To maximize its benefits for generating national economic growth and improving public welfare, the Indonesian palm oil industries need legal clarity and certainty.
“The palm oil industries need a legal certainty. The policy makers should avoid making regulations capricious and overlapping,” the Indonesian Palm Oil Association (GAPKI) Secretary General M. Hadi Sugeng Wahyudiono told participants of a seminar on considering the balance of CPO production for domestic need and exports, its urgency and challenges in Jakarta on Wednesday (19/06/2024).
According to Hadi, companies which have been in operation with formal licenses and legal rights issued by the government over their land areas they cultivate should be allowed to continue their plantation operations to push up national production.
He said that ensuring conducive condition is necessary to allow the palm oil industries able to increase production to meet the rising local need and exports, and to help generate a strong national economic growth toward reaching Indonesia Emas (Golden Indonesia) 2045.
“Based on the projection of the economic coordinating ministry, toward reaching Indonesia Emas 2045, Indonesia’s palm oil production should reach 92.44 million tons in 2045. It’s almost double the production in 2024 at 59.78 million tons,” said Hadi.
Unfortunately, Hadi said there are still homeworks that should be completed to increase the national production and productivity. “Our CPO yield has been declining since 2010. It’s because the composition of our aging plantations has reached 6.57 million hectares or 40% of total plantation acreages,” he said.
He said the volume of exports also tends to decrease, which was partly due to the weak economic growth of the importing countries and also the increase of other vegetable oils’ supplies.
According to Hadi, the implementation of mandatory biodiesel program, which will be upgraded by the next government in the future, makes the production increase more urgent. If the next government realizes its plan to upgrade the biodiesel mandatory program to B50 (mixture of 50% biodiesel), then it will certaintly increase domestic consumption of palm oil for biodiesel production.
“Based on analysis, if the local production is stagnant, while local demand continues rising and export volume maintained at over 30 million tons per year, within the next 5 years there will be a shortage of supply to meet the rising demand at home and abroad,” said Hadi, who is also the Chief of Agronomy dan Sustainability at PT Astra Agro Lestari Tbk.
Hadi said that the government has been implementing the replanting program for smallholders’ oil palm plantations as a solution to increase the palm oil production and productivity. “But it needs further breakthroughs. By ensuring the use of quality seedlings for replanting and fund assistances from the government, we expect the replanting will increase production and productivity of smallholders’ plantations,” he said.
Regarding the overlapping regulations, Hadi reminded again the need for Indonesia to have a special board, which will be fully assigned to manage the Indonesian palm oil industries. The special palm oil board should be integrated and has full authority to manage palm oil industries from upstream to downstream.
“There are many benefits that can be contributed by the palm oil industries for Indonesia, especially in supporting the strong growth of national economy toward reaching “Indonesia Emas” (Golden Indonesia) 2045. But we need to create a very conducive condition for our palm oil industries to grow strongly,” concluded Hadi. (*)
Source: sawitkita.id
