Indonesia to Limit Crude Palm Oil Export

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.

Joko said

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

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