Global Economy Slows Down, Indonesia's Palm Oil Production Remains Stable

JAKARTA - Indonesia's palm oil production will certainly survive in 2024. This is at a slow pace global economic growth due to the impact of inflation. "We are optimistic that national palm oil production can survive in the global market, both meeting domestic needs and export trading," said Member of the Advisory Board Gapki Joko Supriyono in a statement in Denpasar, Bali, Saturday. Gapki projects an increase in palm oil production this year by around 3.8 percent and 2024 by around 4.9 percent, although challenges in the palm plantation sector are still occurring, including related to legal aspects and sustainability. Stagnant productivity is caused by the large number of plants not yet producing, namely 1.5 million hectares or 91 percent and plants producing or mature by 91 percent, however 46 percent of which have entered a decline in productivity due to aging. Joko Supriyono explained the increase in palm oil production occurred in 2017 to 2019, in line with land expansion in the early 2000s, but on its way in 2020-2022 the increase in volume was not accompanied by an increase in yield. This year's production is on average 15 tons per hectare. This figure still needs to be boosted to be maximized, "he said in the 2023 Palm Oil Conference (IPOC) activity in Bali, Thursday (2/11/2023). Joko further explained that in terms of consumption experienced a significant increase every year. Domestic consumption increased by 5 percent, due to the need for an increased biodiesel implementation program of 48 percent, then followed by an oleochemical of 10 percent, and food of 5 percent. This year is recorded for the first time the consumption of biodiesel, namely by 10.6 million tons, higher than the 10,3 million tons of food consumption," said Joko. This year, according to Gapki, export activities have also started to return to various countries outside the European Union such as India, China and Pakistan. Meanwhile, for exports to Europe experienced a downward trend since 2015, due to the policy of anti-addeping biodiesel exports, even though the export market target in Europe is currently around 12 percent.

He considered that the challenges of the palm oil industry are increasingly complicated, the average age of plants that have grown so that replanting or rejuvenation is needed as an effort to increase plant productivity in the midst of land constraints due to the moratorium. "Even though the phenomenon is so, we must be able to create solution steps, of course collaborating with the government as policymakers," he said. In addition, now the industry that is the backbone of the Indonesian economy must face the problem of overlapping forest areas in the midst of so large demand for sustainability. Improving production to meet the new renewable energy program B50/B100 and meeting global needs is a step that must be taken, Various efforts to increase plant productivity and expansion must emphasize aspects of sustainability so that the value of Indonesian palm oil products is accepted in the international market," said Joko.