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Palm oil is Indonesia’s most strategic vegetable oil commodity and has a vast market. The potential and opportunity to utilise this industry for the welfare and economic growth of the palm oil industry require some support.
“Legal certainty is needed and policymakers need to avoid fast-changing and overlapping regulations,” said Secretary General of the Indonesian Palm Oil Association (GAPKI), M. Hadi Sugeng Wahyudiono, at the seminar Measuring the Balance of CPO Production for Domestic and Export Needs: Urgency and Challenges, in Jakarta, (19/6)
This issue is still considered a challenge and requires serious attention. According to Hadi, companies already running and have licenses and land rights issued by the government should focus on production and increasing productivity.
Moreover, in welcoming the Golden Indonesia of 2045, the need for palm oil for domestic consumption and export will continue to increase. This increase must be accompanied by production and productivity.
“From the projection of the Coordinating Ministry for Economic Affairs quoted by GAPKI, palm oil production to welcome the Golden Indonesia of 2045 will reach 92.44 million tons,” Hadi continued. This figure is almost double the production in 2024 which reached 59.78 million tons.
Unfortunately, according to Hadi, the production and increase in palm oil productivity still become a challenge that must be resolved. “In terms of yield, it has been declining since 2010,” he said. This situation is due to the age composition of as much as 40% of the old crop, which covers an area of 6.57 million hectares.
The declining export volume is also due to the unfavourable economic growth of importing countries and the increasing supply of other vegetable oils.
On the other hand, according to Hadi, increased production should be given more attention given the new government’s plan to use palm oil as energy through the biodiesel program. There are indications that the palm oil mix will reach 50%. This plan will increase domestic consumption.
“Based on the results of the analysis, if domestic supply stagnates and demand continues to grow and export volumes are maintained above 30 million tons per year, in the next 5 years there will be a shortage of supply to meet domestic and foreign demand,” said the Gapki Secretary General who also serves as Astra Agro’s Chief Agronomy and Sustainability.
So far, according to Hadi, the business world and the government have used the smallholder oil palm replanting program (PSR) as a solution. A further breakthrough is needed. With better seeds and financial assistance from the government, the program is expected to increase the productivity of the palm oil industry.
Regarding the overlapping policies, Hadi reminded us of the need for Indonesia to have a special institution or agency that handles the palm oil industry. This agency must be integrated from upstream to downstream. Thus, there will be no more overlapping regulations, policies or implementation in the field.
There are several steps are essential. According to Hadi Sugeng, there is much that the palm oil industry can contribute to welcoming Golden Indonesia 2045. “We need to continue to guard the national palm oil industry together,” Hadi said.
Source: Majalah Hortus
