Cooking oil producers assured of CPO supply

Cooking oil producers assured of CPO supply

JAKARTA (JP): Minister of Forestry and Plantations Sumahadi
gave assurances yesterday that the country's three state cooking
oil producers would continue to receive a supply of crude palm
oil (CPO) from state plantation companies.

Sumahadi said that state plantation companies PT Perkebunan
Nusantara (PTPN) I through to XIV would continue to provide
39,200 tons of CPO each month to the cooking oil producers.

He said the recent appointment of 14 private refining
companies to process CPO produced by state plantation companies
was designed to ensure that smaller private refineries received a
fair share and to prevent big companies from monopolizing CPO
refining.

"We did not tender the contracts to process CPO because if we
had, only large refining companies would have won," the minister
said.

PTPN currently produces about 1.9 million tons of CPO every
year, approximately 30 percent of the country's total production.

There are three state cooking oil producers, PTPN II, which
has a processing capacity of 5,200 tons per month, PTPN IV, which
has a processing capacity of 14,000 tons per month, and PT
Perkebunan Agrintara (a joint venture between all the state
plantation firms), which has a processing capacity of 30,000 tons
per month.

Sumahadi issued a directive announcing the appointment of 14
private refining companies earlier this week. The refineries are
located in Jakarta, Surabaya in East Java and Medan in North
Sumatra.

The three state cooking oil producers were not among those
appointed. They usually receive a monthly CPO supply of 39,200
tons from the 14 state plantation companies.

"Olein produced by the appointed refineries will be used by
Bulog (the State Logistics Agency) to stabilize cooking oil
prices on the domestic market," Sumahadi said in his directive.

Company executives from the state cooking oil producers
questioned the appointments, saying that the directive might
result in a new monopoly for Bulog.

But Sumahadi refuted this suggestion yesterday. Bulog would
not be the sole distributor of olein produced by the appointed
refineries, cooperatives would also be allowed to distribute the
produce, he said.

Cooking oil producers buy CPO from plantation companies before
processing it into olein. One hundred kilograms of CPO can be
processed into 70 kg of olein.

Indonesia is the world's second largest producer of CPO after
Malaysia. The country's total production of CPO this year is
expected to reach 5.9 million tons. Only 3.5 million tons are
required to meet domestic demand.

There are currently 65 cooking oil producers operating in the
country. They hold a combined annual processing capacity of 4.2
million tons. (gis)