JAKARTA - Palm oil is one of the most important commodities for Indonesia because of its use as a raw material in various industries such as food products, beauty, oleochemical industry, and biodiesel.
The scarcity and increase in the price of palm oil at the end of 2021 shows very broad implications for the supply chain of palm oil commodities in Indonesia.
The shortage is thought to be due to the decline in global vegetable oil production which has led to an increase in demand for palm oil as a substitute. Domestic CPO (Crude Palm Oil) production in 2021 fell by 0.31 percent.
However, consumption increased by around 6 percent due to an increase in demand after the easing of policies related to the COVID-19 protocol.
Palm oil is known to have a higher productivity than other vegetable oils on the same land area, so attention to the palm oil production process that is managed sustainably can create a balance between meeting needs and the sustainability of the natural resources themselves.
“Sustainability commitments need to be adapted to current conditions in a comprehensive context where practically it can encourage producers to provide product choices from sustainable sources with attention to environmental preservation followed by education and campaigns on the use of sustainable products. So that consumers can buy products whose origins are clear through verification and certification," said WWF Indonesia Acting CEO Aditya Bayunanda in a written statement, Friday, June 24.
A discussion forum among representatives of the business world, associations, and civil society organizations, organized by the Indonesia Business Council for Sustainable Development (IBCSD) and WWF Indonesia as part of the Green Lifestyle program.
The goal is to encourage collaboration and stakeholder contributions to achieve sustainable production and consumption.
The increase in domestic demand for CPO needs to be balanced with attention to environmental, social and governance (ESG) aspects to ensure sustainable management, especially from the production side.
Meanwhile, M. Windrawan Inantha from the Roundtable on Sustainable Palm Oil / RSPO said, “We see that in forming a market for a sustainable product, by bringing together needs and demands, it is a shared responsibility from the producer and consumer side. RSPO makes it easy to trace palm oil products through certification in the palm oil supply chain from upstream to downstream,” he said.
The implementation of sustainable palm oil practices in Indonesia is in line with Indonesia's G20 presidency which encourages sustainable investment as one of the priority agendas to encourage businesses to have sustainable governance in every line of the company's operations.
Meanwhile, Arya Kusumo from PT Lion Super Indo expressed support for this effort.
"We see that the application of sustainable practices is a broad and dynamic thing, but we are trying to learn and be part of the process of change towards good production supported in collaborative ecosystems that have the same goal," he continued.
Attention to sustainable palm products has also begun to be shown by the service and lodging sectors.
"We are open to continuing to look for hotel amenities products that use sustainable palm products and in general we are also trying to implement a sustainability commitment to hotel operations," said Kartika Aryani from Alila Hotel Solo.
Procurement of sustainable products has also received attention from MSME actors.
“Buyers of our food and beverage products learn to recognize the origin of the products they consume, especially those produced from something good such as organic, not damaging the environment and others. It is possible that in the future our customers will also learn about the food they consume comes from good palm oil practices,” said Nadya Pratiwi, owner of Nasi Peda Pelangi.
In addition, the awareness of consumers themselves to use products that are environmentally and socially friendly is also getting higher.
“My hope as a consumer representative is to find quality palm oil products that are certified and at low prices. Then we can take care of the environment from ourselves and start thinking about the impact we are doing on the earth,” said musician and volunteer for Bumi Pertiwi, Nugie.
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