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

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.