02 March 2020

The Corona virus outbreak that occurred in Wuhan, China and spread to several countries will not have a major impact on the palm oil industry in Indonesia.

“The decline in CPO exports is more due to problems in shipping, especially in countries exposed to the corona virus. The decline in Indonesian exports also occurred in all commodities. If we look at the movement of shares, almost all have decreased, “said President Director of PT Mahkota Group Tbk, Usli Sarsi on one occasion recently.

He believes, in the next few months, the demand for CPO abroad will stretch again. According to him, CPO is needed by humans as cooking oil, cosmetics, energy and others. The spread of the corona virus is from human to human, not from food to human. that means the corona virus, has no impact on CPO.

The obstruction of CPO shipments abroad automatically affects the income of the palm oil industry from upstream to downstream. Palm Oil Mills (PKS) that do not have stockpile tanks will have difficulty producing CPO. As a result, PKS does not dare to buy Fresh Fruit Bunches (FFB) from the community. Meanwhile, mills that have stockpile tanks can still produce CPO, even though it has also decreased.

“For ourselves there is no reduction in CPO production, even though the world is currently hit by the corona outbreak,” said Usli. He said, CPO production is processed into cooking oil at the Mahkota's CPO Refinery factory which is ready to operate, after which it is put into a very large capacity stockpile tank.

According to him, the government's move to have Indonesia's palm oil production consumed domestically is the right step. So far, foreign palm oil production has become very easy to play. The B20 program, continuing to B30 in 2020 and in July this year to B40 and then in early 2021 increasing B50 shows the seriousness of the government in releasing Indonesia's palm oil dependence abroad. “You can imagine if palm oil is used for energy needs, then the demand for palm oil will continue to increase,” he said.
 

Pressure

The amount of pressure on Indonesian palm oil by foreign countries, Usli said, was more due to business competition, not because of the low quality of Indonesian palm oil. So far, Indonesian palm oil has always been in the spotlight, especially vegetable oil producing countries. This shows that Indonesian palm oil has high quality.

Finally, the European Union increased the safe limit standard for 3- monochlorpropanediol (3-MC-PD) contaminants in cooking oil from 2.5 ppm to 1.25 ppm.

According to Usli, this is not an obstacle, as the demand can still be met because there are tools that can improve the quality of palm cooking oil with 3-MCPD at 1.25 ppm. The lower the 3-MCPD, the more expensive the cooking oil.

Various attempts by foreign countries to limit the sale of CPO and Indonesian palm cooking oil are better than vegetable cooking oil. This is what has not been exported so far.

Source : https://analisadaily.com/e-paper/2020-03-02/mobile/index.html#p=11