JAKARTA: Indonesia, the world’s top palm oil producer, is planning to set an exports quota for the tropical oil within the next five years in order to boost the by-product industry, Industry Minister M.S. Hidayat said yesterday.
“For the downstream industry to grow, we need to limit exports by introducing a quota system,” Hidayat told reporters.
In future, firms will be penalised for shipping more than their quota, while those who produce refined products will get incentives.
Overseas markets, mainly India and China, absorb nearly 70 per cent of Indonesia’s palm oil output. The government has projected this year’s output to reach 23 million tonnes, up from 21 million tonnes in 2009.
More than half of Indonesia’s palm oil exports are in the form of crude palm oil, whereas rival Malaysia ships out mostly higher-value refined products.
The government has planned to build three special palm clusters in the country’s biggest palm-producing province of Riau, in North Sumatra, and in East Kalimantan, where new ports and refining facilities will be built.
Meanwhile, Jakarta-based PT KBN Nusantara, formerly known as the state marketing centre, did not hold any auction yesterday due to lack of stocks.- Reuters
Source : Business Times
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