15 October 2019

DATA from the Ministry of Trade states that the total national production of cooking oil (migor) per year is around 14 million tons. Of this amount, around 5.1 million tons to meet domestic needs, and the rest for foreign market needs.

Of the domestic needs, almost 50 percent still consume bulk migor which is not guaranteed cleanliness. To ensure the cleanliness of migor, the Ministry of Trade plans to ban the circulation of bulk migor. What are the opportunities for migor in Indonesia? Could packaged migrants replace bulk migrants? The following are excerpts of separate interviews with the President Director of PT Mahkota Group Usli Sarsi and the owner of PT Paluta Inti Sawit, Iwan Hartono.

Analysis: Referring to the Ministry of Trade's data, the need for domestic migor is excessive, why did the Mahkota establish a migor factory?

Usli: We see the population of Indonesia increasing every year. That means the demand for migrants will continue to grow. If the current production capacity does not increase, the need for domestic migrants can decrease. Just imagine that CPO importing countries such as China and India dare to invest tens of millions of dollars to establish a migrant factory.
 
So why don't we dare to invest in establishing a migrant factory whose raw materials are very much available in Indonesia? From here we see that raw material dependence is very high. If Indonesia has many migrant factories, then the results of oil palm plantations can be processed into finished materials for export. That way the selling price can be higher.

In addition, it will increase employment and increase state income. If Indonesia is able to produce migrants in large quantities, migrant factories abroad will automatically stop or not produce. The quality of migrants produced by Indonesia will be better than abroad.

Analisa: What is the reason that domestic production of migrants is better than abroad?

Usli: Here's the thing. CPO, the raw material for the production of migrants, still contains acid. The longer the CPO is stored, the higher the acid. The higher the acid, the more CPO is wasted when processed into migrants. That means the price of migrants becomes expensive. Indeed, the acid contained in CPO can still be used to make soap. It's just that the value will drop. Imagine if CPO is directly processed into migrants in Indonesia, it can minimize acid substances.

In addition, if CPO is processed into cooking oil, it can last longer because it has gone through filtration, so there is no more acid. We currently have 26 storage tanks. Each tank has a capacity of 3,000 tons.

Analisa: What about vegetable migrants such as soybeans, sunflowers from abroad?

Usli: I believe that oil palm-based migrants are a solution to meet the needs of the community, not only domestically but also abroad. In comparison, one hectare of oil palm is equal to 10 hectares of soybean to produce the same amount of migrants. So to meet the growing demand, a lot of land is used for vegetable-based migrants and it is impossible to provide large tracts of land.

Analisa: The Ministry of Trade plans to ban bulk migrants from circulation, does this benefit packaged migrants producers?

Iwan: The government's plan was already in place in 2014, but until now it has not been implemented. With the ban, it can certainly benefit packaged migor producers. But keep in mind, migor companies, apart from producing in bulk form, also make it in packaged form. Indeed, there are also companies that provide migrants in bulk form and do not provide them in packaged form. So far, the presence of bulk migrants can be said to be a rival to packaged migrants. The cheaper price of bulk migrants causes many consumers to buy.

Analisa: Why is bulk migrants of questionable hygiene and quality?

Iwan: In principle, the cooking oil process is the same. Only the distribution is different. Bulk migrants are distributed via tank cars to traders. By traders, bulk migrants are put into drums or jerry cans in large quantities. It could be that during this distribution process it is contaminated.

Meanwhile, packaged migrants, since the factory has been packaged so it is impossible to be contaminated. Moreover, currently around 50 percent of cooking oil in the country is sold in bulk form. This opens up opportunities for cheating by producers by mixing used cooking oil in order to take big profits. I think by banning bulk cooking oil from circulation, the government wants to protect consumers to get hygienic and quality cooking oil.

Analisa: What are the obstacles making it difficult to ban bulk cooking oil in circulation?

Iwan: Actually there are no obstacles. In terms of production, I believe that packaged cooking oil producers are able to provide domestic needs. Likewise in terms of distribution, there are no obstacles. If bulk cooking oil uses a tank car, packaged cooking oil uses a box car.
 
In terms of actual price, it is also not much different, although bulk cooking oil is cheaper. But in my opinion it is still within the reach of the community. It's just a matter of how serious the government is. I see that the government is still hesitant in banning the circulation of bulk oil, considering that since 2014 until now it has not been implemented. Is it true that January 1, 2020 the government implemented a ban on cooking oil bulk circulation? I think cooking oil packaging can replace bulk cooking oil. (fahrin malau)​

Source : http://harian.analisadaily.com/jentera/news/pemerintah-harus-serius/807661/2019/10/13