RI's CPO output to drop 15% due to inferior seedlings

Zakki P. Hakim, The Jakarta Post, Jakarta

Indonesia risks losing at least 15 percent of its crude palm oil production within five years if it fails to address the problem of inferior oil palm seedlings, the Indonesian Palm Oil Producers Association (Gapki) has said.

"By having inferior oil palms, output will remain low over the next 25 years. Inferior oil palm seedings produce only half of the CPO as top-quality seedlings," Gapki chairman Derom Bangun said on Tuesday.

Top-quality seedlings can produce up to four tons of crude palm oil (CPO) per hectare after three years, compared to between 1.5 tons and two tons per hectare for inferior seedlings, he said on the sidelines of a seminar on the prospects for CPO in the country.

Indonesia -- the world's second largest palm oil exporter after Malaysia -- produced an estimated 12 million tons of CPO last year. Gapki expects the country's output to reach 13.6 million tons this year, on the assumption that the inferior seedlings will not affect national production.

Derom said the greatest risk came from small plantations, whose owners were more likely to buy the cheaper inferior seedlings due to a lack of knowledge and money.

A one-year-old high-quality seedling costs about Rp 11,000 (US$1.15), while inferior seedlings sell for Rp 7,000 each.

Minister of Agriculture Anton Apriyantono said during the seminar, hosted by the University of Indonesia's School of Economics, the government was encouraging plantation firms to develop and produce more high-quality seedlings and certify them.

This certification, he said, would help small growers differentiate between inferior and quality seedlings, which have little physical difference.

"We estimate that 400,000 hectares of the country's total oil palm plantation area, particularly those areas owned by smallholders, are planted with inferior seedlings," he said.

Smallholdings -- which accounted for 35 percent of the country's total oil palm plantation area of 5.24 million hectares in 2003, or 1.83 million hectares -- are just entering their replanting cycle, Derom said.

Oil palm plantations need replanting every 25 years.

"After five years, maybe all the small plantations will be using inferior seedlings. Then we can expect a 15 percent drop in CPO production," he said.

Indonesia has six firms producing 100 million seedlings per year, while demand stands at 130 million seedlings to plant and replant 700,000 hectares of oil palm plantation annually, said oil palm firm PT Gemareksa Mekarsari CEO Eddy Martono.

Indonesia exported 8.66 million tons of CPO last year, up about a third from the previous year's 6.39 million tons, according to data from the Central Statistic Agency.

Gapki expects exports this year to reach 9.5 million tons, assuming local consumption remains at about 3.4 million tons.

Palm oil is the raw material for, among other things, cooking oil, soap and detergent.