JAKARTA: Indonesia plans to limit exports of crude palm oil
(CPO) to encourage downstream work, its Industry Minister M.S. Hidayat
said yesterday, a trade group doubts would easily lead to the hoped for
surge in value-added products.
However, the plan is unlikely
to have any near-term impact on CPO supplies onto the world market.
The domestic market’s capacity to absorb output of refined products
and the government’s definition of such products is key, Joko
Supriyono, secretary general of the Indonesian Palm Oil Association
Joko said if the government definition of
downstream industry excluded refined products the industry has been
producing, “it is going to be difficult to achieve the target”.
Biodiesel firms, with combined capacity of 3.1 million tonnes, only
produced 344,000 tonnes in 2009. They have also stopped supplying
state fuel distributor Pertamina from last month.
there was a misperception that Indonesia’s palm oil industry only
exported CPO, while in fact exports of refined products such as RBD
palm olein and RBD stearin accounted for about 40 per cent of total
The government plans to limit exports of CPO to
not more than 50 per cent of output in 2015, and to 30 per cent of
output in 2020, Hidayat said.
“Such a target can be achieved
by developing the downstream industry, which can create added-value
locally,” said he added. – Reuters
Source : Business Times