Oil palm estates to concentrate on East Indonesia
Oil palm estates to concentrate on East Indonesia
JAKARTA (JP): Prospective investors who want to establish oil
palm plantations will be expected to focus their attention on
eastern Indonesia, as the western part of the country is already
saturated with oil palm estates, Minister of Agriculture
Sjarifudin said.
The minister made this statement yesterday in response to
questions from legislators who asked how the government would
handle the increasing number of applications, from foreign and
local investors, to establish oil palm estates.
Sjarifudin said the government had decided to concentrate the
development of oil palm plantations in provinces that have not
yet received a "fair share" of the plantation pie.
These provinces include Jambi, East Kalimantan, Sulawesi and
Irian Jaya. Most of the prospective investors, Sjarifudin said,
are either Malaysians or joint venture companies between
Malaysian and Indonesian entities.
"There are enough investors already operating in the more
developed western provinces like Riau and West Kalimantan," he
said during a break at a hearing with members of the House of
Representative's Commission IV on agriculture and forestry.
Sjarifudin said the government would expedite recommendations
to investors who planned to invest in the "needy" provinces.
The government is also planning to direct the 500,000 hectares
of plantation projects, to involve transmigrants, toward the
less-developed eastern provinces. These projects, he said, would
be managed by domestic companies.
Sjarifudin said the applications that have been filed to
establish agricultural plantations cover 1.2 million hectares,
most of which are intended for oil palm.
Outside of these applications, the government has granted
recommendations, licenses or area allocations for around 690,000
hectares. Most of these, however, are located in Riau, West
Kalimantan, North Sumatra and West Sumatra.
Sjarifudin said the infrastructure in West and East Kalimantan
did not differ much, but the 200,000 hectares of plantations in
West Kalimantan far exceeded the 8,000 hectares in East
Kalimantan.
Minister of Forestry Djamaludin Suryohadikusumo said earlier
this month that up to 650 companies were lining up for government
permits to convert forest areas into agricultural plantations.
If all 650 are granted permits, up to 6 million hectares of
forest would be converted into plantations.
It is unclear whether the plantation investors referred to by
Sjarifudin were those also mentioned by Djamaludin.
Responding to questions on palm oil trade, Sjarifudin said the
government was not planning to curb palm oil exports as a way of
guaranteeing sufficient supplies on the domestic market.
Instead, he said, the government would encourage the
development of downstream palm oil refineries to accommodate
crude palm oil (CPO) production.
CPO is a raw material for cooking oil, an important commodity
which is regulated domestically by the National Logistics Agency
(Bulog).
Last year, shortages of CPO on the domestic market -- caused
by favorable prices on the export market -- caused cooking oil
prices to surge, making Bulog partly reliant on imports.
Sjarifudin said yesterday the government would provide
incentives for investment in downstream palm oil industries.
"This is better than banning exports," he said. (pwn)
JAKARTA (JP): Prospective investors who want to establish oil
palm plantations will be expected to focus their attention on
eastern Indonesia, as the western part of the country is already
saturated with oil palm estates, Minister of Agriculture
Sjarifudin said.
The minister made this statement yesterday in response to
questions from legislators who asked how the government would
handle the increasing number of applications, from foreign and
local investors, to establish oil palm estates.
Sjarifudin said the government had decided to concentrate the
development of oil palm plantations in provinces that have not
yet received a "fair share" of the plantation pie.
These provinces include Jambi, East Kalimantan, Sulawesi and
Irian Jaya. Most of the prospective investors, Sjarifudin said,
are either Malaysians or joint venture companies between
Malaysian and Indonesian entities.
"There are enough investors already operating in the more
developed western provinces like Riau and West Kalimantan," he
said during a break at a hearing with members of the House of
Representative's Commission IV on agriculture and forestry.
Sjarifudin said the government would expedite recommendations
to investors who planned to invest in the "needy" provinces.
The government is also planning to direct the 500,000 hectares
of plantation projects, to involve transmigrants, toward the
less-developed eastern provinces. These projects, he said, would
be managed by domestic companies.
Sjarifudin said the applications that have been filed to
establish agricultural plantations cover 1.2 million hectares,
most of which are intended for oil palm.
Outside of these applications, the government has granted
recommendations, licenses or area allocations for around 690,000
hectares. Most of these, however, are located in Riau, West
Kalimantan, North Sumatra and West Sumatra.
Sjarifudin said the infrastructure in West and East Kalimantan
did not differ much, but the 200,000 hectares of plantations in
West Kalimantan far exceeded the 8,000 hectares in East
Kalimantan.
Minister of Forestry Djamaludin Suryohadikusumo said earlier
this month that up to 650 companies were lining up for government
permits to convert forest areas into agricultural plantations.
If all 650 are granted permits, up to 6 million hectares of
forest would be converted into plantations.
It is unclear whether the plantation investors referred to by
Sjarifudin were those also mentioned by Djamaludin.
Responding to questions on palm oil trade, Sjarifudin said the
government was not planning to curb palm oil exports as a way of
guaranteeing sufficient supplies on the domestic market.
Instead, he said, the government would encourage the
development of downstream palm oil refineries to accommodate
crude palm oil (CPO) production.
CPO is a raw material for cooking oil, an important commodity
which is regulated domestically by the National Logistics Agency
(Bulog).
Last year, shortages of CPO on the domestic market -- caused
by favorable prices on the export market -- caused cooking oil
prices to surge, making Bulog partly reliant on imports.
Sjarifudin said yesterday the government would provide
incentives for investment in downstream palm oil industries.
"This is better than banning exports," he said. (pwn)