Palm oil industry closes to foreigners

Palm oil industry closes to foreigners

JAKARTA (JP): The Minister of Agriculture, Sjarifudin
Baharsjah, said yesterday the government had frozen the palm oil
industry for foreign investors because of oversupply in world
markets.

"There have been overwhelming investments in the palm oil
industry and we have been encouraging foreign investors to help
develop plantation-related industries other than palm oil," he
said at the opening of a one-day meeting between government
officials and executives from large plantation firms.

He said Indonesia needed to consolidate its palm oil industry
to face the world market's bleak conditions.

The Director General of Plantations, A.R. Tondok, said world
palm oil production was estimated to be 24.7 million tons this
year, while consumption just 17 million tons.

World annual palm oil output is projected to increase to 27.8
million by 2001 and to 30.8 million tons by 2012, while
consumption to just 19.2 million tons and 22.5 million tons.

He said Indonesia's production of crude palm oil (CPO) rose to
3.86 million tons last year from 3.47 million tons in 1995.

Indonesia exported 1.57 million tons of CPO in 1995.

But Sjarifudin said foreign investors could join or buy
domestic companies' projects if the project's development could
not be continued.

Malaysia's Primary Industries Minister, Lim Keng Yaik, said in
Penang, Saturday, that Indonesia had temporarily frozen new
Malaysian oil palm plantation investments because the sector was
overinvested.

Lim said Indonesia imposed the freeze to let the palm oil
sector to consolidate after an influx of investments, especially
from Malaysia.

So far, 27 Malaysian companies have inked joint venture
agreements with Indonesian firms to develop 1.5 million hectares
for oil palm cultivation. (10)