Govt needs to set jatropha price

The Jakarta Post , Bogor | Thu, 06/26/2008 10:39 AM | National

Experts called on the government on Wednesday to establish a market price for crude jatropha oil (CJO) to draw more investment into the country's developing biofuel sector.

"Jatropha is not considered a food, so there's no fixed price for it. An established market price can draw local and overseas investors' interests in developing biofuel in the country," said Chandra Indrawanto, a researcher from the Indonesian Center for Estate Crops Research and Development (ICERD).

Chandra was speaking on the sidelines of the International Jatropha Conference: Research for Near Future Business, currently being held in Jakarta.

"The government should set a jatropha market price. It would be great if it also subsidized jatropha oil just like it subsidizes kerosene and diesel," he said.

He added the current price of jatropha biodiesel was over Rp 5,000 (54 US cents) per liter. He said an established market price would also benefit jatropha farmers.

Erliza Hambali, director of the Surfactant and Bioenergy Research Center (SBRC) at the Bogor Institute of Agriculture (IPB), concurred.

"I suggest the government set up a market price for CJO. The fixed price will make it easier for people, including farmers and businessmen, to plan their finances when developing the fuel," she said.

"Today, farmers and companies across the country set their own prices. So obviously the price of jatropha seeds varies from place to place."

Researchers believe the fuel from the Jatropha curcas plant is a viable alternative to fossil fuels, and could even help ease the country's energy crisis. Jatropha plants can grow in arid regions with minimal water.

The Energy and Mineral Resources Ministry said a total national investment of Rp 200 trillion was needed by 2010 to develop 5.25 million hectares of plants for use in biofuels.

Bachtiar Parmus, a jatropha specialist at PT Rajawali Nusantara Indonesia (RNI), said any proposed jatropha market price would depend on the price of seeds, which cost between Rp 500 and Rp 1,000 per kilogram.

"The market price for jatropha will increase once development of the biofuel sector has stabilized. However, the jatropha business is still unstable at the moment because we only started development of jatropha oil in 2005. But the government can play an important role by establishing a CJO price," he said.

"The government should issue regulations to help develop jatropha biofuel. Today, most farmers are reluctant to cultivate the plants because they don't know who to sell the seeds to. And they can't process them into oil because they either don't know how or else lack the equipment to do so." (trw)

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