Bulog to deliver 40,000 tons of CPO to Russia

The Jakarta Post, Jakarta

The State Logistics Agency (Bulog) will deliver about 40,000 metric tons of palm oil products valued at US$15 million to Russia within the next three months, part of a $192 million countertrade deal between the two countries, according to the Indonesian Palm Oil Producers Association (Gapki).

Gapki chairman Derom Bangun said Bulog would purchase the palm oil products, including crude palm oil (CPO) and vegetable fat, from local producers.

"Bulog has asked Gapki members to deliver their bid prices as soon as possible," Derom said on Wednesday.

He also said the countertrade deal would help boost the country's CPO exports to Russia this year.

"We hope to be able to export another 40,000 tons of CPO to Russia this year," he said.

Indonesia exported some 13,044 tons of CPO to Russia last year, far lower than the previous year's figure of about 40,719 tons.

Under the countertrade deal, signed last week by President Megawati Soekarnoputri during a visit to Russia, Indonesia will receive Sukhoi Su-27 and Su-30 jet fighters and Mi-35 helicopters from Russia.

Russia will receive some 30 commodities and manufacturing products from Indonesia of equal value.

The export commodities include textiles, coffee, rubber, chocolate, black pepper, electrical appliances and fishery products.

Meanwhile, Derom said the country's exports of CPO and derivatives products would reach some six million tons this year.

The association is also optimistic that this year's CPO output will reach 9.6 million tons, from last year's figure of nine million tons.

Derom said this year's expected output increase was the result of the harvest from trees planted between 1996 and 1998.

Indonesia is the world second-largest palm oil producer after Malaysia.

Derom also predicted that the price of CPO would remain strong this year.

"A reduction in supply of sunflower oil will increase demand for CPO, thus keeping the price strong," he said.

The price of CPO stood at about $407.50 per ton as of last Monday.