![\"\"](\"https:\/\/gapki.id\/en\/dir-site\/uploads\/2024\/02\/dr_fadhil_hasan_kinerjaekselen.co_.jpg\")
<\/p>\nJAKARTA – The Indonesian Palm Oil Association\u2019s (GAPKI) Foreign Division Head Fadhil Hasan said that Indonesian palm oil industry is now facing three serious challenges, which should be thoroughly resolved to avoid future downturns.<\/p>\n
<\/p>\n
Fadhil said the three challenges are concerned with global trade restrictions, export market diversification, and stagnant production of palm oil.<\/p>\n
\u201cWe have many problems on the supply side, which include stagnant production. We don\u2019t expect any area expansion, although demand has been continually rising. So, there will be a mismatch of supply and demand. If we don\u2019t solve the problems of supply and trade restriction, it will be very tough for us,\u201d Fadhil said through the podcast of Rosediana Suharto on Monday (22\/1\/2024).<\/p>\n
According to Fadhil, to deal with the trade restriction he proposed that the government should pursue dialogs. \u201cIn case of Indonesia\u2019s concept and proposal is rejected, the government should pursue a solution through the mechanism of the World Trade Organization (WTO),\u201d he said.<\/p>\n
He said that Indonesia should not emulate the policies imposed by European Union (EU) for other kinds of commodities. \u201cWe cannot say\u2026you are wrong. But at the same time we do the same, like banning exports of nickel, quartz sand, and others,\u201d the senior economist of INDEF (the Institute for Development of Economics and Finance) said.<\/p>\n
Fadhil said that regulations like the European Union Deforestation-free Regulation (EUDR) will continue to exist to hinder Indonesian commodities on the grounds of climate change. Indonesia, therefore, should start diversifying its export market.<\/p>\n
\u201cWe cannot do it soon, but we have to start implementing it (diversification). Looking forward, we have to reduce our reliance on export markets, and maximize our domestic market,\u201d he said.<\/p>\n
Regarding the production, he noted that based on data of GAPKI during the last five years since 2018, Indonesia\u2019s palm oil production, including CPO and CPKO, averaged at around 50.6 million tons per year.<\/p>\n
\u201cThe realization of replanting program for smallholders\u2019 oil palm plantations during the period of 2016-2023 only reached 306,000 hectares. In 2022 alone, only 36,000 Ha plantations were replanted. But actually, the government has targeted that the replanting program should reach 180,000 Ha of plantations every year in 21 palm oil producing provinces,\u201d said Fadhil. (*)<\/p>\n