Downstream Sector Offers Great Opportunities for Palm Oil

MOST of Indonesian palm oil products exported to global market in 2018 are used as feedstock in downstream industries for food and non food products. The trend has been growing increasingly since the last five years and has contributed significantly to national income.

Minister of Industry Airlangga Hartarto said that 81% of CPO exports are used in downstream industry, and around 19% for feedstock. “The use of CPO has been growing increasingly, around 15-20% for energy and the rest for foods and non foods. We have included a roadmap in the master plan of national industrial development,” Airlangga said at a Breakfast Meeting in Jakarta, Tuesday (20/8/2019). 

According to him, the Ministry of Industry in collaboration with businesspeople have made strategic alteration to raise CPO price in global market by improving downstream businesses in the industry and implementing biodiesel mandatory program for domestic use.

The Government has made a strong commitment to make CPO downstream industry one of national top priorities. Airlangga said that Indonesia has great opportunities to improve palm oil downstream industry and to optimize the use of vegetable oils. Indonesia is the world’s largest Crude Palm Kernel Oil (CPKO) producer that produced 47 million tons CPKO in 2018. “Palm oil production is projected to increase significantly.

Export of palm oil products brings US$22 billion in foreign exchange revenue into the country per year.” In trying to integrate the industry with the national biofuel policy, the Ministry of Industry has provided a roadmap for producers and consumers to set their business plan. “The roadmap is aimed at creating an industry with low carbon emission and eco-friendly,” Airlangga added. ***