Jakarta: Palm oil is the national importance and has already been part of Indonesia’s foreign strategic policy. This was conveyed by the Executive Director of the Council for Palm Oil Producing Countries (CPOPC), Mahendra Siregar, in front of 134 Ambassadors, Consul Generals and Indonesian Consuls in one of sessions of the Working Meeting of the Heads of Representations of the Republic of Indonesia (Raker Keperri) on 14 February 2018 in the Foreign Ministry.
“Indonesia needs to diversify its palm oil export destination in order to maintain its market alternative despite the EU’s plan to phasing out palm oil-based biofuel by 2021,” Mahendra said in his presentation.
Palm oil is Indonesia’s main export commodity. The export value of palm oil products exceeded Indonesia’s oil and gas exports (valued at USD 15 billion in 2017) and far exceeded the exports of five other Indonesian major plantation commodities such as rubber, cocoa, coffee, sugarcane and tea. Based on the data released by the Indonesian Palm Oil Association (GAPKI), the export value of Indonesian palm oil in 2017 reached US$ 22.97 billion, an increase of 26% from 2016 of US$ 18.1 billion, which was 12.3% of total exports by 2016. The main export destinations of Indonesia’s palm oil are India (34%), European Union (18%), China (14%), Pakistan (10%) and Bangladesh (6%).
Palm oil also has a strategic value to the Government’s efforts in terms of equitable development and poverty alleviation. The President Director of Indonesia Palm Oil Plantation Fund Management Agency (BPTP-KS), Dono Boestami, as one of the panelists, said that the palm oil sector was expected to reduce poverty by more than 10 million people, and at least 1.3 million people in rural areas were able to breach the poverty line due to the growth of the palm oil sector.
Meanwhile, the Second Deputy for Food and Agriculture Coordination, Musdhalifah Machmud, spoke the same thing by explaining that 41% of palm oil plantations were managed by smallholders. Oil palm plantations contributed to 5.5 million jobs and supported the lives of 12 million people. In this case, palm oil contributed to the achievement of sustainable development goals, especially in relation to poverty alleviation, economic growth, renewable energy development, and food supply.
Addressing inequality and strengthening local economy are a game changer in observing palm oil. Palm oil is not only seen as a major industrial interest, but palm oil is the interest of millions of smallholders and consistent with the global agenda of SDGs. Therefore, last year the President Joko Widodo gave special attention and made the palm oil as a strategic sector, among others through replanting and giving land certificates to smallholder farmers.
However, it is recognized that palm oil exports continue to face many challenges and obstacles to market access, both tariff and non-tariff, related to environment, health, human rights, and others. “The entrepreneurs expect the support of Indonesian Representatives to voice the new paradigm of palm oil as an important commodity for the welfare of smallholders and the achievement of SDGs, especially to consumer countries that have a negative perspective on palm oil,” said the Secretary General of the Indonesian Palm Oil Association (GAPKI), Togar Sitanggang. The three panelists also emphasized the importance of collaboration of all existing stakeholders both domestically and abroad in fighting for palm oil. (Source: Directorate for Trade, Commodity, and Intellectual Property/Ministry of Foreign Affairs).