Gapki sees govt palm oil export target attainable
Fitri Wulandari, The Jakarta Post, Jakarta
The government's plan to increase the export value of fat and edible oil products this year by 9 percent is attainable on the back of price rises in the commodities and higher export volumes, says an industry leader.
Chairman of the Indonesian Palm Oil Producers Association (Gapki) Derom Bangun said that crude palm oil (CPO) export volumes were projected to increase by 7.69 percent this year to 7 million tons from 6.5 million tons last year.
He added that the price of CPO, kernel palm oil and copra oil would continue to increase this year on strong demand, particularly from the fast-growing economy of China.
"We think that the target is pretty good. It is achievable," Derom told The Jakarta Post on Monday.
The government is planning to increase the export value of fat and edible oil products by up to 9 percent this year to US$2.68 billion from $2.47 billion. The products are on the list of 15 export products to be prioritized to increase the country's non- oil and gas exports by up to 7 percent this year.
On the production side, the association has projected this year CPO production to increase to 10.4 million tons compared with 9.9 million tons last year.
The extra 500,000 tons of production this year was expected to come from new plantations created in 1991 and 2000.
Derom said that the government's export value target of $2.68 billion this year could be surpassed, as the price of copra and kernel palm oil had been on the increase.
"The price of copra and kernel palm oil has been increasing at an average of 10 percent to 15 percent. If this were factored in, the export value of edible oil could reach $3.3 billion," Derom said.
According to Derom, for kernel oil alone, Indonesia's exports reached 700,000 tons per annum. It is sold to more than 100 countries.
With regard to CPO, the price of the commodity has been strengthening for the past few years.
CPO price now stands at an average of $550 per ton. Last year, the price stood at around $470 per ton.
The improving economy in China, Derom said, had boosted the CPO price for the past few years. China raised its import quota of edible oil from 2.4 million tons last year to 2.7 million tons for 2004.
However, Derom said exports of Indonesian CPO to India would fall slightly from 1.8 million tons last year to 1.6 million tons this year, partly due to India's new policy on the beta-carotene content in CPO.
Derom said the Indian government has required that imported CPO should contain beta-carotene of between 500 parts per million (ppm) to 2,500 ppm.
"Our CPO contains beta-carotene below the requirement set by the Indian government. We shall find out whether that is caused by planting or processing methods," Derom said.
Lower exports to India would not be a concern as higher exports to China were expected to offset the export decline, Derom said.
Indonesia also exports CPO to Pakistan, Bangladesh, the Netherlands and new markets such as eastern Europe.