Entrepreneurs expect that exports of crude palm oil [CPO] in 2013 to reach 19 million tons if this year’s production reached 28 million tons, while domestic consumption reached 9.2 million tons. Domestic market uptake to CPO for food ingredients is as much as 5.7 million tons and to meet industry needs 3.5 million tons. Meanwhile, the CPO export market is especially to India, China, and European Union. Looking at the export volume, an adequate export port is needed.
Executive Director of Indonesian Vegetable Oil Refiners Association (GIMNI), Sahat Sinaga, on Wednesday (July 7), said that Indonesian needed three new ports for export of CPO and its derivative products. It can reduce cost of exports. He believed that the existence of the new ports will create efficiency and effectiveness of export of CPO and its derivative products.
So far, he said, due to inefficient ports, CPO entrepreneurs must bear the high additional cost (demurrage). The consequence is that the shipping cost of Indonesian CPO is more expensive that its competitors, which ranges from USD 15 to USD 20 per ton. He explained that at this time, 79% of CPO production is exported, and the rest is supplied to the country.
In his opinion, the three ports can e constructed o the west coast of Sumatera, Pontianak, and East Kalimantan. The handling capacity of each port ranges from 600,000 to 700,000 tons per year. He added that if there is a new port on the west coast of Sumatera, export can be done directly to India, Thus, he said, the shipping cost could be heaper, which is around USD 8 per ton.
He stated that the national CPO industry needs to have a marketing strategy. For domestic needs, the needs of CPO and its derivative products can be met from the factory in Kalimantan and Sulawesi. While, for exports, it should be done by the mills in Sumatera. He said that the absorption of CPO in the country should be increased. The goal is to attract the industry to market its products in the country.
He saw that CPO production is still low. One of the causes of low national CPO production is that the productivity of the community oil palm plantations is not optimal. Therefore, the government needs to program rejuvenation or replanting of old palm trees, as well as providing seed support for the program.
So that the community can follow the productivity of large estates, intensive maintenance, fertilization, and application of Good Agricultural Practices (GAP) are also required. In addition, to improve the competitiveness and added value of domestic CPO, the national palm, oil industry will be directed toward the development of downstream industry.
He reported that exports of CPO and its derivative products from January to April 2013 showed an increase. Total export volume from January to April 2013 this year reached 7.17 million tons. When compared to the same period last year, exports from January to April his year rose 17% or up 1.24 million tons from 5.93 million tons in January-April 2012.
The price of CPO in the world is increasingly sluggish. CPO price from April to mid May 2013 ranged between USD 825 to USD 857.5 per metric ton. The price range has decreased compared to the previous months at USD 835 – USD 870 (March), USD 835 – USD 885 (February), and USD 810 – USD 885 (January). He expects that the CPO market will be more bullish this month. Approaching Ramadhan, it is expected that demand of some countries will increase. “We expected that CPO exports will continue to increase because we have abundant natural resources”, he said. (E)
Business News - July 12,2013