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Indonesia accounts for 58 percent of sustainable palm oil production

Jakarta (ANTARA News) – Indonesia accounts for 58 percent of the worlds sustainable production of palm oil, the Roundtable on Sustainable Palm Oil (RSPO) said.

“Indonesia contributes 58 percent to the worlds palm oil production with RSPO certificate,” RSPO Indonesia Director Tiur Rumondang said here on Thursday.

The contribution is expected to increase in the coming years, Tiur said in a written statement.

She said currently, the worlds sustainable production of palm oil with RSPO certificate totaled 12.15 million tons or 17 percent of the worlds production of palm oil.

However, consumption of sustainable production of palm oil in the country is small with low from domestic consumers, she noted.

RSPO has also launched a program called “Youth Leader in Sustainability”, which is a program to look for futures leaders expected to increase the consumers awareness backed up with increase in demand for sustainable palm oil based products.

The program is launched in collaboration with WWF-Indonesia, The Body Shop and Sinar Meadow, to last from January until May, 2017 with a series of activities including roadshow to a number of universities, seminar and process of selection.

Meanwhile, Conservation Director of WWF-Indonesia Arnold Sitompul warned about the alarming condition varieties of global biological resources including in Indonesia.

One factor reducing the varieties of biological resources is unsustainable exploitation of natural resources such as in the expansion of palm oil industry, Arnold said.

A new breakthrough is needed in promoting sustainable palm oil industry to ensure preservation of the varieties of biological resources, he said.

The countrys exports of crude palm oil (CPO) and its derivatives totaled 25.7 million tons in 2016 or down two percent from 26.2 million tons in 2015 on weather phenomenon El Nino toward the end of 2015.

“By the end of 2015, the countrys production of oil palm fruits shrank as a result of widespread drought brought about by El Nino that year. Exports dropped 2 percent on shrinking production by up to 30 percent,” Chief Executive of the Oil Palm Plantation Fund Management Body (BPDP) Bayu Krisnamurthi said here earlier this month.

Bayu said despite the decline in the export volume of CPO, palm oil kernel (PKO) and derivatives , the commodity export value in 2016 rose 8 percent to US$17.8 billion or around Rp240 trillion from US$16.5 billion in 2015.

The increase in the export value followed a 41.4 percent surge on the average in the price of CPO in the global market in 2016 compared to US$535 per ton in June 2015, US$558 per tons in January 2016 and US$789 per ton in December 2016.

However, BPDP warned that exporters must not be carried away by the surge in price, which was considered too high as it could weaken competitiveness of the countrys commodity in world vegetable oil market.

“We know the countrys palm oil is competing sharply with soybean oil in the world market. If the price of palm oil comes closer to the same level of the soybean oil price, the competitive edge of palm oil would fall,” he said .

The RSPO certificate will have greater access for Indonesian CPO to international market especially Europe.

Indonesia is the worlds largest producer of CPO. (*)