RI plans palm oil board

The Jakarta Post, Jakarta

The government and industry players plan to establish a coordinating board for crude palm oil (CPO) to boost Indonesian CPO's competitiveness on the world market, according to the Indonesian Chamber of Commerce and Industry (Kadin)

Soedjai Kartasasmita, Kadin's head of plantation and forestry affairs, said the Indonesian Palm Oil Board (IPOB) would aim to coordinate policies on and solve problems faced by the industry.

"We hope it (the establishment of the board) can be signed by the end of this year," Soedjai told reporters on Thursday.

He said problems facing the industry were, among other things, overlapping government policies, lack of marketing and promotion and lack of technology development.

The industry is currently overseen by seven ministries that rarely coordinate in producing policies on the industry.

With the establishment of the board, which will comprise representatives of the government and the industry, the government is expected to produce effective policies to boost the industry's competitiveness.

According to Soedjai, Indonesia is far behind Malaysia in handling the palm oil industry.

"Malaysia has implemented integrated and comprehensive management to handle their CPO industry. Indonesia, meanwhile, has done nothing. The management is still partial and has no focus," Soedjai said.

He added that Malaysia was also conducting aggressive marketing campaigns to boost CPO exports and had marketing representative offices in several countries.

The Indonesian Palm Oil Producers Association (Gapki) earlier said that Indonesia had failed to compete with Malaysia in penetrating several overseas markets due to poor marketing efforts.

Kadin also asked the government to use funds collected from the 3 percent export tax on CPO to develop the country's CPO industry.

"We don't know where the funds are, but we hope some of them can be used to help farmers cultivate their crops," he said.

Indonesia, the world's second largest CPO producer after Malaysia, is projected to produce nine million tons of CPO this year, up from 8.3 million last year, according to Gapki data.

The country's exports are also expected to rise to 5.5 million tons this year, from 4.9 million tons last year.