Business

CPO producers oppose moratorium

Palm oil producers have urged the government to reassess a plan to impose a two-year moratorium on new concessions claiming they are struggling with unproductive land that has limited their ability to increase production.

Speaking at a forum in Jakarta on Thursday, Joko Supriyono, secretary-general of the Indonesian Palm Oil Producers Association (Gapki), said the palm oil industry, due to several “technical problems”, could only utilize half of the land it had concessions for.

These problems stemmed from the various land conditions in concession areas, he said. Some of the land was either rocky or simply unfit for plantations, while some were inhibited by people, Joko said.

Palm oil plantations currently hold concessions for around 7.1 million hectares of land in Indonesia. Experts believe this area needs to be expanded by 3 million hectares within 10 years for Indonesia to meet the growing global demand for the commodity. As of last year, Indonesia was the biggest producer of crude palm oil (CPO), with a total output of 19.4 million tons.

This volume is expected to expand by 13 percent to 22 million tons next year.

Joko said the moratorium, which would come into effect next year, would also hamper the industry’s plan to double its production to 40 million tons by 2020. “Indonesia will experience a breakdown in palm oil production within 10 years if the moratorium is implemented,” Joko said.

The two-year moratorium on the clearing of peatlands and natural forests for oil palm plantations was announced in Norway on May 26 after the country pledged to provide US$1 billion worth of grants to Indonesia if it was willing to reduce emissions from deforestation.

Rosediana Suharto, the executive director of the Indonesian Palm Oil Commission said developing countries such as Indonesia needed to prioritize economic development over the environment.

Rosediana said around 75 percent of central Europe’s forests were cleared as its population boomed, and half of the forests in the US had been cleared before 1900, resulting in 142 million hectares of forest cleared for agriculture.

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