Indonesia and Malaysia Agree to Secure Palm Oil Supply
Monday, 11 August, 2008 | 18:01 WIB
TEMPO Interactive, Jakarta:Deputy-Coordinating minister for the economy, Bayu Krisnamurthi, explained that the collaboration will not be in the form of a cartel or a monopoly. “Malaysia and we have common interests,’ he said in Jakarta last week.
According to Bayu, the collaboration was brought on by the huge palm oil harvests in the two countries, reaching 85 percent of the world’s production. “This year’s production alone reached 18 million tons, more than 10 percent of the average yearly stock,” Bayu said. By 2010, palm oil production is predicted to be about 20 million tons.
However, a surplus production can reduce prices, “not only in Indonesia and Malaysia but also in the world market,” he said. Therefore, the two countries have agreed to allocate the excess stock to the bio-fuel industry.
“For the first time, around 500.000 tons of palm oil will be distributed to the bio-fuel industry in Bali,” he said. The collaboration between the two nations will involve investments in the production and consumption sectors.
Indonesia is also currently developing the use of bio-fuel for the industrial and transportation sectors. Bayu said the government will issue a policy requiring the use of bio-fuel in all economic sectors. “But we are still studying this,” he said.
He acknowledged that the requirement to use bio-fuel can lead to many implications, which is why the government wants to ensure it issues the right policies. "The policy could be that all liquid fuel must contain a certain percentage of bio-fuel," he said.
The government hopes that the industrial and transportation sectors will use bio-fuel because of incentives being offered, such as a reduction in taxes.
CORNILA DESYANA
TEMPO Interactive, Jakarta:Deputy-Coordinating minister for the economy, Bayu Krisnamurthi, explained that the collaboration will not be in the form of a cartel or a monopoly. “Malaysia and we have common interests,’ he said in Jakarta last week.
According to Bayu, the collaboration was brought on by the huge palm oil harvests in the two countries, reaching 85 percent of the world’s production. “This year’s production alone reached 18 million tons, more than 10 percent of the average yearly stock,” Bayu said. By 2010, palm oil production is predicted to be about 20 million tons.
However, a surplus production can reduce prices, “not only in Indonesia and Malaysia but also in the world market,” he said. Therefore, the two countries have agreed to allocate the excess stock to the bio-fuel industry.
“For the first time, around 500.000 tons of palm oil will be distributed to the bio-fuel industry in Bali,” he said. The collaboration between the two nations will involve investments in the production and consumption sectors.
Indonesia is also currently developing the use of bio-fuel for the industrial and transportation sectors. Bayu said the government will issue a policy requiring the use of bio-fuel in all economic sectors. “But we are still studying this,” he said.
He acknowledged that the requirement to use bio-fuel can lead to many implications, which is why the government wants to ensure it issues the right policies. "The policy could be that all liquid fuel must contain a certain percentage of bio-fuel," he said.
The government hopes that the industrial and transportation sectors will use bio-fuel because of incentives being offered, such as a reduction in taxes.
CORNILA DESYANA