The Palm Scribe

Indonesia Aims at Becoming World’s Top Palm Oil Processor

Indonesia, already the world’s top producer, exporter and consumer of palm oil, is now aiming at building the biggest downstream industry for the commodity in the world, a minister said Wednesday (1/12.)

“Indonesia has the objective to become the downstream palm oil biggest (industry) in the world,” Finance Minister Sri Mulyani  Indarwati said in her address on the opening day of the Indonesian Palm Oil Conference.

The minister said the move was in line with President’s Joko Widodo’s objective of transforming the Indonesian economy, from a mere raw material exporter to a producers and exporter of value added products.

Mulyani told the two-day online conference that the government was using taxes and levies to provide support for the development of the palm oil downstream industry.

“Levies, as well as taxes, introduced in this industry are very critical in supporting and reforming the investment climate in order for us to be able to support the downstream industry in Indonesia,” she said.

She added that the government was also providing zones for downstream industries including in  palm oil related products.

“As the downstream grows, so does the added value so that when exported, the goods will certainly yield more foreign exchange that can be used for the greater prosperity of Indonesia,” Mulyani also said in a press release issued after she had addressed the conference.
Mulyani was also quoted in the release as saying that the potential of palm oil as an industrial raw material to be processed into industrial product was huge.
“The thing is, the downstreaming of palm oil products in Indonesia has not been developmed much. Therefore the president asked  that the focus of government policies in this sector should be to develop added value for palm oil products through downstreaming,” she said in the release.
As the world’s biggest producer and exporter of Crude Palm Oil (CPO) Indonesia  was also aiming at being able to influence prices, Mulyani told the conference.

“As the biggest CPO producer and exporter we do want to establish our abilities to stabilize prices of  CPO,”  she said without elaborating.

Mulyani said that palm oil played a significant role in the country’s efforts for economic recovery, not only bringing in sizeable revenues for the government but also provided a livelihood for millions.

The commodity that is planted on 16.38 million hectares of land in Indonesia, 42 percent of this by smallholders, she said.

Earlier in the day Coordinating Minister for the Economy, Airlangga Hartarto told the same conference that “the palm oil sector is the backbone of the Indonesian economy,” and employed more than 16 million people.

Airlangga and Mulyani both said that palm oil ’s contribution to the state coffers was particularly significant in 2021, when prices were at their highest for most of the year.

The virtual conference which will also include a outlook on the prices of palm oil and lauric oils for 2022 and is organized by then Indonesian Palm Oil Producer Association (GAPKI), is attended by more than 1,000 participants coming from 27 countries, the organizers said.

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