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Palm Oil Industry Permanent mainstay Indonesia

Sabtu, 05 Januari 2013 | 03:26

Palm Oil Industry Permanent mainstay Indonesia

Managing Director, Head of Research and Advisory FoodAgribusiness-Asia Rabobank International, John Baker, said the palm oil industry will continue to be a leader in the export of agricultural commodities in line with the position of Indonesia as the largest palm oil producer in the world.

"Indonesia is the world's largest palm oil producer. Production around half of the world production, "said John in a seminar on" Global Economic Outlook-Implications on Indonesia "in Jakarta, Thursday (17/11/2011).

The growth of commodity production is stimulated by the presence of a large investment in oil palm cultivation and production processes across Indonesia over the past decade. Total production in the period 2009/2010 reached 22 million tons. The number rose to 165 percent of the 2000/2001 amounted to 8.3 million tonnes.

During the span, said John, production grew by 11.4 percent per year. Along with the growing demand for palm oil around 2.5 million tonnes per year, Rabobank estimates that Indonesia's palm oil supply could grow 64 percent per year.

"The availability of abundant land to plant (palm oil) and low labor costs provide a competitive cost for Indonesia. Indonesia finally able to shift Malaysia as the dominant producer (komoditias) palm oil, "said John.

Moreover, according to the Indonesian Palm Oil Research Institute and the Ministry of Agriculture, in December 2009, the government has allowed the conversion reached 18 million hectares of land for planting oil palm.

With an abundance of production, commodity agriculture is a mainstay of national exports. Palm oil exports rose 14.3 percent per year since 2001. The export value reached 13.5 billion U.S. dollars in 2010.

According to John, this export growth as a result of the increased demand for vegetable oils. Political and economic reforms also affect stability.

Broadly speaking, he said, the government gave great support to the palm oil industry. For example, foreign investors are allowed to rent land palm plantation and processing activities under the same conditions and terms with local investors. "As the largest palm oil producer, Indonesia will continue its position as a key supplier to the international market. Palm oil will continue to be a leader in terms of revenue in the agribusiness sector, "said John.