Sri Mulyani told Eddy Abdurrachman that his responsibilities were “very heavy and full of challenges” and that the agency needed to monitor the impact of COVID-19. Indonesia lso jumped whereas global crude palm oil (CPO) remained steady. China is the largest importer of Indonesian CPO, according to recent association data.

"I hope that Eddy Abdurrachman with his previous experience as the customs and excise directorate general and the secretary of the Coordinating Economy Ministry can use BPDP-KS funds for programs that are in line with building a sustainable industry,” she said in a statement on Monday.

Read also: Coronavirus drags down commodity prices as demand from China drops

Indonesia has become the largest palm oil-producing country in the world, making up more than 55 percent of world production. The palm oil industry is a significant foreign exchange earner for Indonesia, as it contributes 13.5 percent to the total non-oil and gas exports of US$22.3 billion, Sri explained.

The minister also reminded the agency’s officials that according to the President's direction, the palm oil replanting program must be carried out for 500,000 hectares within the next three years. She suggested BPDP-KS partner with the microcredit program (KUR) to strengthen palm oil replanting financing. 

Last year, the government had simplified requirements for oil palm smallholders to access assistance for the replacement of their old trees through the people's oil palm tree replanting program after the meager realization of the program in 2018.

“I want replanting to be the focus of [BPDP-KS],” said Sri Mulyani.

In 2019, CPO prices fell below their economical price, compelling the government to suspend last September’s export tax imposed on CPO and its derivative products until January of this year to ease the financial burden on palm oil producers.

Read also: Palm oil export levies suspended to help producers cope with low prices

Indonesian Palm Oil Association (Gapki) chairman Joko Supriyono said in a February press conference that he also sees 2019 as a challenging year as trade spats over the EU's sustainability and trade policies hang over the Indonesian industry.

The industry also faced a long period of drought last year, coupled with tariff issues with India.

Gapki data showed that palm oil exports had increased to 36.17 million tons in 2019, up by 4.2 percent from 2018. Indonesia sent most of its palm oil to China in 2019, around 6 million tons, representing 16.5 percent of overall exports last year. India followed with 4.8 million tons (13.2 percent) and the European Union with 4.6 million tons (12.7 percent).

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