Thu, 30 Mar 2006
From: Reuters
Indonesia poised to be top palm oil producer

March 30 2006

SINGAPORE: Indonesia may overtake Malaysia as the world's top palm oil producer by next year, much earlier than previously expected, as Jakarta encourages investments in plantations to profit from the demand boom, a senior official at Rabobank said yesterday.

As Indonesia aggressively pushes palm oil production to use its vast tracks of unused land, more Malaysian plantation firms, unable to find opportunities to expand at home, are putting their money in Indonesia, said Sami Khan, the bank's head of strategic advisory and research for South-East Asia.

"If not this year, we expect Indonesia to be the leading palm oil producer by next year," Khan said.

Earlier, industry analysts were expecting it would take about three years for Indonesia to displace Malaysia as the leading producer of palm oil.

South-East Asia accounts for 90 per cent of global palm oil production.

Hamburg-based oilseeds analysts Oil World expects Malaysia's 2006 palm oil production to rise only 60,000 tonnes to 15.02 million tonnes, thanks to erratic weather conditions. Output in 2005 rose 990,000 tonnes on the year.

But industry and government officials expect healthy growth in Indonesian output this year, rising 1.1 million tonnes to 14.7 million tonnes.

This would sharply narrow the production gap between the two countries.

"Malaysian plantation companies are constrained and finding it difficult to expand. They are increasingly looking for investment opportunities in Indonesia," Khan said.

Despite the sharp rise in global output expected this year, palm oil prices would remain firm because of increased demand from China and the world's thirst for biofuel.

"For the long term, we are bullish on palm oil," Khan said. - Reuters


Thu, 30 Mar 2006
From: JakChat
Comment by Dilli
Many a quick fortune has been made in Sumatra, however after the logging and no replanting the question was asked what should be done with the empty land. The great idea was “let’s grow Palms for Palm Oil to supply the palm oil factories that we will build” . Oh dear, look at all these tree roots, better do something with them, ah- another idea, burn them.

The rainforest soil is more like peat than earth, centuries of arboreal foliage has fallen and deposited itself on the forest mat and has become almost a fuel.

One gentleman I met in Pekanbaru is proud that he has made money in the way described above, what he lacks in manners he makes up for in pointless boasting about how many square kilometres of palm he has, how he obtained this acreage and the disdain he holds for the forestry officials who ask him to tidy up his act, however, many a blind eye is turned with fat brown envelopes.

As you fly in Sumatra, the tranquillity that you seem to see below is in fact hundreds of square acres of straight lines comprising Palm trees to satisfy the aforementioned industry. As this industry grows, more acreage is required and more slash and burn takes place leaving the atmosphere above what used to be pristine rainforest more like the streets of Jakarta with these clouds of ash drifting throughout South East Asia and polluting other nations into the bargain.

As with all peoples in the world, Indonesians need to make money, however, after many many years of corruption at both major and minor levels, the mechanics of normal business routine and the wheels of commerce have been so badly tarnished that without some form of grease they will seize and nothing will happen at all.

This grease has prevented the formation of any form of sustainable resource group as the brown envelopes are bigger carrots to businessmen and officials than the threatened snarl from public bodies trying to change both the mind set of the perpetrators and save a huge natural resource at the same time.

In the past, en route to meetings within the heart of Riau Province, the landscape turned almost desert like. Yes there were palm oil trees, laid out like parade soldiers, however, there was an arid quality to the road and forest behind, dust clouds blew, smoke permeated everywhere and the few last arboreal giants stood naked, without leaves, merely waiting, towering above the non native palms to fall to their graves, because in truth they were already dead, and worse, unlikely to ever return.

If the Indonesians cannot see what is happening, or worse, are not aware that their children will only have memories of these once great jungles, I do indeed shed a tear for them, however, I cannot forgive them as what they are taking from the world is not theirs to take.



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