The growth prospect of palm
industry was extremely bright considering the ever rising demand due to natural
causes like increased population which automatically jacked up demand for frying
oil, growing downstream Industry and lastly development of alternative energy
as substitute to world demand for CPO which influenced demand for CPO
significantly. It was predicted that this bio-fuel would change the world’s
dependency on non-renewable energy.
Price of bio-fuel was today
relatively expensive, but it line with increased production capacity and
consumption prices would by perdition be cheaper. Competition between
palm-based bio-fuel vs. soybeans based or corn-based fuel, generally consumed by
developing nations, ended up with palm-based bio-fuel as winner since the
production cost was cheaper.
Besides, in terms of volume palm
oil was way above soybean and corn. Indonesia was among the few countries being
advantaged by the change of energy platform of the world, since tere were only
two countries which were prevalent the palm plantation industry, i.e. Malaysia
and Indonesia. In Malaysia the growth of palm industry tend to slow down due to
limited space, while in Indonesia the potential for expansion was still wide
open.
However the challenges faced by
the palm industry was not easy. Joko Supriyono, Secretary General of the
Indonesian Palm Producers Association (GAPKI) disclosed in Jakarta on Monday
(19/11) that macro-wise the prospect of palm industry in Indonesia was
favorably good, but many obstacles had to be faced in terms of management and
expansion among other”.
Firstly, overlapping policy and
rules at the central and regional level, such as problem is permit application
for land clearing which made investors hesitant and cost to increase.
Secondly, inadequate infra structure especially
around export harbors. It was predicted that with significant growth of palm
plantations (unless supported by increased harbors capacity, expansion or addition
of new seaports) the palm industry would be interrupted because there would be
vast volumes of materials being unexplored, while absorbing capacity of the
domestic market being limited especially when the Government's bio diesel
program did not progress as expected.
Thirdly the growth of downstream industry was not as
fast as growth of the palm industry itself, resulting in low selling price of
Indonesian palm.
Fourthly and lastly, there was no clear and well coordinated
grand strategy by the Government to develop this industry, although the
Government had declared that the palm industry was the premium sector for non
oil-gas exports and absorption of workforce.
Other points to be observed was , according to Joko,
fluctuation of CPO price In short term and medium term amidst weakening of CPO
price in the global market in Semester one 2012. Somehow export of palm oil
and by product up to July 2012 grew by 7% compared to same period the previous year.
It was predicted that the if climate condition was supportive, the expectation
for Indonesian CPO products in 2012 of 25.5 million tons would be attained in
the hope that export would be 18 million tons.
In facing the above challenges,
players of the palm industry must grab the momentum of growth of the industry
which so far had accommodated 3.5 million workers. “The point was that we must maintain
Indonesia’s position as the world’s greatest CPO producer country amidst
Government’s optimism to set target for CPO production at 40 million tons in
2020” Joko remarked.
Business News - November 23, 2012
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