Observers Say Palm Oil Downstream In Indonesia Makes Progress

JAKARTA - Executive Director of the Palm Oil Agribusicness Strategic Policy Institute (PASPI) Tungkot Sipayung said, so far the downstream oil palm has recorded great progress.

According to him, the variety of palm oil products is increasingly diverse, resulting in an increase in the economic value of the product.

"Towards 750 types of downstream and competitive products in the world market. The larger the downstream value increases and the more needed downstream innovation," Tungkot said as quoted by ANTARA, Tuesday, December 12.

In 2010, he continued, Indonesia was still exporting Crude Palm Oil (CPO) or raw goods of around 70-80 percent. However, in 2022, about 90 percent of exports are simple (half-finished) processing.

He assessed that so far the downstream of palm oil has recorded great progress. However, domestic palm downstream still requires the acceleration of innovation adoption in order to produce various downstream products.

According to him, the delay in innovation adoption occurred due to the low innovative and creative culture in the downstream industry. Innovation has not become an indicator of the company's main performance, and still weak policy support.

The support for research funds distributed by the Palm Oil Plantation Fund Management Agency (BPDPKS) is already available and has been utilized by researchers, as well as the results in the form of interventions or patents.

He encouraged the results of the research to be adopted by industry players.

Meanwhile, General Chairperson of the Indonesian Palm Oil Entrepreneurs Association (Gapki) Eddy Martono said, since 2018, the downstream oil palm industry has been running and is no longer dominated by CPO.

In 2022, added Eddy, the export of CPO raw materials is 3,463 thousand tons out of a total export of 33,928 thousand tons of palm oil (PKO). Meanwhile, crude palm kernel oil (PKO) is 107 thousand tons.

Next, exports in the form of downstream products in the form of refined palm oil amounting to 24,410 thousand tons, refined PKO as much as 1,335 thousand tons, biodiesel as much as 4,179 thousand tons and oleochemicals reaching 4,179 thousand tons.

Eddy said domestic demand continued to increase from 16.7 million tons in 2019 to 21.1 million tons in 2022.