Palm Oil Becomes The Largest Non-Oil And Gas Foreign Exchange Producer In Indonesia, How Much Value?

Oil palm illustration. (Photo: Doc. Ministry of Agriculture)

JAKARTA - Oil palm is a strategic commodity that has a big role in the lives of Indonesians. Not only that, oil palm is also a national strategic commodity with a high level of urgency for the domestic and global economy.

Acting Director of Partnership for the Palm Oil Plantation Fund Management Agency (BPDPKS), Edi Wibowo, said that Indonesia is the world's largest producer of palm oil.

Furthermore, Edi said, palm oil products and their derivatives have even been exported all over the world and are Indonesia's largest foreign exchange earning commodity from the non-oil and gas sector.

"The average export value (palm oil) per year reaches 21.4 billion US dollars or an average of 14.19 percent per year of Indonesia's total non-oil and gas exports," he said, in a Webinar entitled Business Prospects of Vitamin A & E Based Palm Oil, Wednesday, December 9.

In fact, said Edi, during the COVID-19 pandemic, the palm oil sector was proven to be able to survive and still contribute a large amount of export foreign exchange to the state budget.

"Until August 2020, foreign exchange collected from palm oil exports reached US $ 13 billion amid the sluggishness of other foreign exchange earning sectors such as oil and gas, coal and tourism," he explained.

Absorb Big Labor

Edi said that oil palm plantations and industries have also created millions of jobs in the country. Good for oil palm farmers, factory workers and other workers along the oil palm production chain from plantation to final product.

"There are approximately 4.2 million direct workers and 12 million indirect workers who are absorbed by the palm oil sector," he said.

Oil palm, said Edi, has also contributed to making Indonesia a producer of biodiesel or renewable energy that is more environmentally friendly than fossil fuels. The raw material biodiesel comes from palm oil by blending it with diesel oil in the form of B30.

"Since January 2020 (B30), Indonesia has become a world pioneer in the utilization of the biodiesel mixture in the world's largest diesel fuel which reduces the dependence of our country of origin to import diesel oil while reducing the trade balance deficit in the oil and gas sector," he said.