Palm Oil is in Raising Star

Foto by Domi Yanto/SawitFest 2021
Palm Oil is in Raising Star

InfoSAWIT, JAKARTA – Minister of Trade Indonesian Republic M. Lutfi delivered good and shock news. Indonesia’s trade balance was in surplus and hit the highest one up to 35,34 billion US dollar since 2004 - 2021. This happened for five major commodities, they were, coal, crude palm oil (CPO) and its derivatives, iron and steel, automotive and its spare part, and the last was electronics. What is interesting is CPO and its derivatives are the mainstay to our exchange.

Palm oil contributed about 35 - 40 percent of the total vegetable oil markets in the world. In 2021, CPO exports could increase for more than 20 billion US dollar or increased 155 percent compared to last year. For Indonesia, CPO is the biggest exchange provider from non-oil and gas export that reached 27,3 billion US dollar in January – October 2021. CPO exports to Europe kept increasing though some vegetable oil producer countries tried to put pam oil out of their products. CPO from Indonesia is in raising star.

Palm oil industries in Indonesia could hire 16,2 million men. Of economic statistic, palm oil contributed 3.5 percent from gross domestic product (GDP), minimize inflation 1,75 percent, and spending up to 1,74 percent. Palm oil made trade balance positive, this is the backbone of economy in national level and should be supported.


Palm Oil Production Increasing Trend

Central Bureau of Statistic (CBS) mentioned, palm oil production in Indonesia increased in the last five years. In 2019, the production reached 48,42 million tons or increased 12,92% from the previous year that reached 42,88 million tons. The production kept increasing from 31,07 million tons in 2015 to be 31,49 million tons in 2016. And the highest leap was in 2017-2018 or from 34,94 million tons to be 42,88 million tons or increased about 22,72%.

Meanwhile, Palm Oil Plantation Fund Management Agency (PFMA) claimed, palm oil production in 2020 was on the annual average production. Director of PFMA, Eddy Abdurachman told, in 2020, palm oil production reached 51,58 million tons, or higher than annual average production that reached 37,57 million tons. In 2019, palm oil production had stocks about 4,6 million tons.

Anti-climax of Palm Oil Cultivation

But Covid-19 pandemic impacted to CPO exports. In 2020, the export volume reached 34 million metric tons, or decreased 9% compared to the previous year. But the values increased 13,6% annually to be 22,97 billion US dollar or equal to Rp 321,5 billion (the assumption: Rp 14.000 per US dollar) in 2020. The value increased for the increasing palm oil product price in the year. By these, palm oil plays important roles to the economy nationally. The portion reached 14,19% in average to non-oil and gas exports nationally.

CPO production in 2021 could be reaching 47,47 million tons and palm kernel oil (PKO) production reached 4,48 million tons, in total, they reached 51,95 million tons.

To Check Out the Fifth Typology to Solve Smallholders’ Palm Oil Plantations in Forest Regions

Executive Director of Indonesian Palm Oil Association (IPOA), Mukti Sardjono said, palm oil production in October 2021 reached 4,04 million tons. The numbers were smaller than those in September 2021 that reached 4,17 million tons.

According to field survey, November and December 2021 production could be increasing within the total about 8,58 million tons and PKO about 815.000 tons. It means, 2021 CPO production could be 47,47 million tons and 2021 PKO production could be 4,48 million tons or in total, 51,95 million tons. "Compared to 2020 CPO production that reached 47 million tons, it did not significantly increase, or only about 0,934%. IPOA told, 2021 export exchange from palm oil could be reaching about US$ 30 billion or about Rp 429,7 billion. (*)

By: Pramono Dwi Susetyo

Worked at Ministry of Environment and Forestry