InfoSAWIT, JAKARTA – Robert Hii, palm oil industrial observer and founder of independent web, CSPO Watch, emphasized the cost factor. He told that though palm oil is good to plant and develop in China and many know it, as a matter of fact, Malaysia and Indonesia have no concern about it. There is no explanation about the challenges, namely in workers’ salary but everything will have solution.
“Other writers like to describe that palm oil is a cheap oil. This is wrong. This could be more productive based on the region rather than soybean or radish oil. Palm oil is labor intensive but it is never reflected in the price globally,” Robert said, as quoted from Chinadialogue.
He also mentioned, soybean and rapeseed can be planted, harvested by machines while palm oil should be cultivated manually. Fresh fruit bunch (FFB) within more than 20 kilogram needs to be harvested, and transferred manually. He interviewed many workers that suffer kyphosis – the bent in the backbone (unnormal backbone) – as the impact of heavy physical work. One kind of vegetable oil which may be similar with palm oil cultivation is olive oil but the extra worker can be reflected by olive oil price.
Palm oil sector in Southeast Asia depends on the low salary – workers. According to 2020 report about target and fair salary in palm oil sector in Indonesia published by Earthworm Foundation, the harvester got Rp 120 thousand per day in average or about 54 yuan or US$ 8,50 if they could harvest 1,2 tons of FFB per day. But not every harvester can do it.
Palm oil plantation in Malaysia depends on migrant workers from Indonesia. They got their salary about RM 1.100 per month or 1.675 yuan or US$ 262 in 2019 and increased to be RM 1.200 in 2020.
Knowing that there is no palm oil industry in China, rubber industry can be the comparison. Chief of Palm Oil Development Group at Rubber Research Institution from Tropical Agriculture Science Academy China, Zeng Xianhai said, rubber workers in Hainan and Yunnan got 3.000 – 4.000 yuan per month or about 4.000 – 5.000 in private rubber plantation.
Zeng and Lin Weifu agreed that China is not ready to develop palm oil plantation massively. It gets lots of pressure to develop the plantation at the scale 10.000 mu (667 hectares) to get profits.
In China, the land is cultivated in smaller parts. It will spend much to get transfer of usufructuary. It is difficult to develop big scale plantations. Rubber expert, Lin Weifu said, market prospect of new Re-you 6 (palm oil seed) is difficult to know because there is no cost estimation without big scale mill where there is no operating still in China. For now, they only did was just laboratory test.
Lin mentioned that it was a dilemma. If they kept planting palm oil, the first planting would be harvested in the two or three years to go without pressure to extract palm oil. If there was a company to produce machine (to process palm oil), it was impossible because there was no supply for them. Actually, there had been companies discussing with researcher team to cooperate in reducing palm oil import. But they were not interesting for realizing the massive numbers of investment and the planting to do. “He thought, the next expansion would continue after production test done in small scale and other infrastructures would be prepared and ready,” Lin said.
Discussing about costs, Zeng Xianhai said China could not directly compete to price but needed to differentiate the country with other producers. This would need unique variety. He suggested ‘Re-you 40’ as the sample. Its characteristic is that the oil is less than 30% of saturated and unsaturated fat, it is 50% smaller than common palm oil. This could help to minimize cardiovascular disease risk.
for more, please read Majalah InfoSAWIT, April 2022
