Revenues from Palm Oil Can Support National Currency

PALM oil can be one of the savior of the rupiah exchange rate that is currently prone to falling against the US dollar exchange rate. Through the export of palm oil, the value of Indonesia`s exports is estimated to reach 18 billion US dollars or around Rp 252 trillion in 2017. Of course, Indonesia`s foreign exchange earnings will be greater if the government and private parties also increase the export of palm oil derived goods. Through this way foreign exchange reserves will be stronger and can be utilized to stabilize the rupiah exchange rate. `If only Indonesia does not act as producer only but also doing the downstream production, it will certainly make the trade balance surplus, thus giving a positive impact on the rupiah exchange rate,` said Deputy Chairman of the National Economic and Industrial Committee (KEIN) Arif Budimanta, Tuesday (08/05/2018). If this downstream production program is done, then it become the process of adding value to palm oil which impact on the trade balance will drive a surplus.  Arif estimates that by 2020, consumption of palm oil will reach around 40 million tons. Usually oil palm is used as raw material of biodiesel, cooking oil, margarine darn shoreting, crude palm oil (CPO), to oleochemical. `This is an enormous potential, so do not let this opportunity be exploited by our competitors whose resources are far below Indonesia,` he said. In addition, the Indonesian government must also conduct trade diplomacy to encourage the export of CPO and its derivative products. Besides, policy implementation, research and development, promotion and marketing collaboration are also needed by industry players to expand their market share, including enhancing competitiveness in the downstream palm oil industry. The Malaysian palm oil industry, supported by well-established research and development activities, is now having a very solid downstream industry. ***