CPO contaminated in Deli Tama tanks

JAKARTA (JP): Palm oil producers and traders in North Sumatra have urged the government to act firmly and quickly to stem fallout from the rejection of 19,000 metric tons of Indonesian crude palm oil (CPO) at Rotterdam Port last month due to diesel oil contamination.

"The contaminated CPO originated from PT Deli Tama Indonesia's storage tanks at the North Sumatra port of Belawan and any solution to the problem should start there," a major CPO producer in Medan told The Jakarta Post here on Wednesday.

Another trader in Medan claimed that contamination was limited to CPO originating from Deli Tama Indonesia's tanks, but the incident tarnished the image of exporters from the province and throughout the country.

None of Deli Tama Indonesia's executives in Medan was available for comment.

However, an official of state-owned PT Sucofindo in Jakarta, which is in charge of inspecting CPO for acidity and purity, confirmed that Deli Tama Indonesia tanks were the source of the contaminated CPO.

The Indonesian Palm Oil Producers Association said on Wednesday that CPO exports to the Netherlands were suspended over the shipment of three cargoes of contaminated CPO.

The association added that two scheduled shipments to the Netherlands from Belawan Port were canceled after the discovery of a second contaminated cargo in Rotterdam two weeks ago.

The CPO trader from Medan urged the industry and trade ministry to investigate Deli Tama Indonesia, a subsidiary of state-owned PTPN III plantation company, to determine how the contamination occurred.

"MV Paulina, which carried part of the contaminated CPO from Belawan, also carried CPO from other storage tanks at the port owned by private companies. But only the cargo pumped from Deli Tama Indonesia's tanks was contaminated," said the trader who asked for anonymity.

He said a thorough and immediate investigation into Deli Tama Indonesia was imperative because all state-owned plantation companies store their CPO for export or inter-island shipment in Deli Tama's tanks.

"We are greatly concerned about this incident because Rotterdam is the center of European palm oil trading and the gateway to the European common market," he added.

Indonesia, which is projected to produce a total of 5.5 million tons of CPO this year, usually exports between 2.5 million to 3 million tons annually, including about 300,000 tons to the Netherlands.

According to the Dutch Palm Oil Industry Association, the 19,000 tons of contaminated CPO were found in the cargo of three ships from Belawan.

The trader said the Indonesian government should ensure thorough disposal of the contaminated CPO.

"If the contaminated CPO was reshipped to Indonesia, the CPO market in the country would be contaminated as well. Domestic cooking oil companies or importers from other countries would become apprehensive that any CPO they might buy in the next few months might be the refined product of the contaminated CPO," the trader added. (vin)