27 June 2019

Medan, (Analisa). The government move to sue the European Union to the World Trade Organization (WTO) for discrimination of palm oil (CPO) products has the support of Thailand and Malaysia.

“The support of Thai Prime Minister Prayut Chan-o-Cha when meeting President Joko Widodo on the sidelines of the 34th ASEAN Summit in Bangkok Saturday, June 22, 2019 will further strengthen the steps taken by Indonesia,” said President Director of PT Mahkota Group (MGRO), Usli Sarsi to Analisa, Tuesday (6/25).

Although Indonesia CPO exports to the European Union are not many, they can have a systemic impact on Indonesia's CPO exports to a number of countries such as China, Pakistan, India and others because they are said to have damaged the environment.

The issue of deforestation linked to Indonesian CPO is very inaccurate. The case of forest logging in Indonesia occurred in 2008 and since 2010 forest logging has been very rare and until now.

“The case of forest logging questioned by the European Union in 2008 is very irrelevant. If you want to go back to the 1990s, EU countries also logged for soybean crops on a large scale. On the other hand, palm oil produces more oxygen than soybean,” Usli explained.

According to Usli, the decline in the price of Fresh Fruit Bunches (FFB) is not solely due to the rejection of Indonesian CPO to the European Union, but because there is an economic downturn in many countries.

The economic downturn was further exacerbated by the trade war between China and the United States. This feud affects other countries that export many products to the two countries, including Indonesia.

“We hope that the meeting of the two heads of state at the G20 will find common ground in resolving the trade war,” Usli said.

Farmer

With FFB prices between IDR 900/kg and IDR 800/kg, oil palm farmers can still make a small profit. But if the FFB price falls below Rp700/kg, farmers will find it difficult to survive.

“With planting capital of IDR 500 per kilogram, it is very unlikely that farmers will make a profit with the price of FFB sold at IDR 700 per kilogram. Moreover, the distance between the plantation and the factory is far, the costs incurred will increase,” he said.

According to Usli, the government must immediately take steps to save oil palm farmers. Moreover, in the second semester in August and September there was a peak harvest in North Sumatra. Do not let the peak harvest of FFB prices fall and farmers do not benefit.

“I am sure that the price of FFB will not decline again. Even if it happens, it will not be for a long time, only a week or two weeks,” he said.

The government must reduce Indonesia's CPO dependence abroad. The implementation of 20% Biodiesel (B20) in 2019 has absorbed 3.8 million tons of CPO. If B30 is implemented in 2020, it will absorb 8-9 million tons of CPO. The increasing use of Biodiesel absorbs more and more CPO.

In addition to the use of Biodiesel, the government must encourage the palm oil refinery industry to become finished materials. If there are no obstacles in August the palm oil refinery plant in the form of bulk food oil owned by the Mahkota Group is ready to operate. With the presence of a palm oil refinery plant, FFB owned by farmers around the factory can be absorbed without depending on foreign demand.

“This is the first step. After food oil, the next plan will make biodiesel, soap, butter and other derivatives from palm oil,” he explained.

Indonesia still needs many refineries. Moreover, CPO which is the raw material is very much available. This is an attraction for foreign investors to invest in Indonesia. (rin)

Source :  http://harian.analisadaily.com/ekonomi/news/pabrik-refinery-selamatkan-harga-cpo/756541/2019/06/27