VICE OF CHAIRMAN APINDO NORTH SUMATRA USLI SARSI PALM OIL CAN BE A INDONESIA ECONOMIC POWER
15 January 2024
The government move to downstream palm oil is not only to save farmers and the palm oil industry in the country, but it can also become the strength of the Indonesian economy.
“For decades, Indonesia's palm oil production in the form of Crude Palm Oil (CPO) has been dependent on foreign countries. This can be seen from the volume of Indonesia's CPO exports continues to increase, while the value of Indonesia's CPO exports fluctuates and experiences more decline, “said the Deputy Chairman of the Indonesian Employers Association (APINDO) North Sumatra in charge of agriculture and plantations, Usli Sarsi via short message, Friday (12/1).
Referring to the Customs data of the Directorate General of Customs and Excise (PEB and PIB) of the Ministry of Finance, Usli said, the volume and value of Indonesian CPO exports for the period 2000-2015 tended to increase. In 2000, the volume of CPO exports was 4.1 million tons, rising to 26.5 million tons in 2015. Meanwhile, the value of Indonesia's CPO exports in the 2000-2012 period rose from 1.1 billion USD in 2000 to 17.6 billion USD. Then it dropped to 15.4 billion USD in 2015.
The decline in export value, said Usli, shows that CPO production is easily played with the aim of lowering the price of Indonesian CPO. This is of course very detrimental to the palm oil industry players, one of which is farmers.
According to Usli, Indonesia is the only country that has the potential to improve the palm oil industry. In terms of land, Indonesia is a very suitable country for oil palm cultivation. Indonesia is the most extensive country crossed by the equator where oil palm plants can thrive. It is not surprising that Indonesia is the largest country with palm oil plantations. With the area of oil palm plantations owned, Indonesia is the largest CPO producer in the world.
“There are still many empty lands that can be used as oil palm plantations without destroying forests and peatlands. In addition, Indonesia's palm oil production can still be increased from 2.70 tons per hectare to 3.90 tons per hectare of CPO equivalent. It can be imagined that Indonesia's CPO production is abundant,” Usli said.
Abundant palm oil production is very profitable considering that palm oil products can be processed into various kinds of products. So far, most palm oil products are still processed into raw CPO and only a small part is processed into products such as cosmetics, cooking oil, soap and several other products. There are hundreds of derivative products that can be produced from palm oil.
To process abundant palm oil products, Usli continued, downstreaming is the answer. By downstreaming commodities that were previously exported in raw form or raw materials into semi-finished or finished goods. That automatically absorbs a lot of employment.
The Palm Oil Plantation Fund Management Agency (BPDPKS) noted that the performance of the domestic palm oil sector involves 2.4 million independent farmers and 16 million workers. If downstreaming is successful, more workers will be absorbed because there will be many industries that manage products made from palm oil.