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Jakarta Post

Palm oil sector relies on domestic demand as exports drop

  • Norman Harsono


Jakarta   /   Mon, September 21 2020   /  01:00 am
According to Agriculture Ministry data in 2015, total oil palm plantation area is 11.24 million hectares.(Shutterstock/File)

Growth in demand for Indonesian palm oil this year will be driven by domestic consumption as exports drop amid the COVID-19 pandemic, according to the Indonesian Palm Oil Association (Gapki). Indonesia, the world’s top palm oil producer, is expected to raise domestic consumption by a slight 1.2 percent year-on-year (yoy) to 15.8 million tons in 2020, Gapki data unveiled on Sept. 1 show. The growth will be entirely driven by the government’s 30 percent palm oil-mixed biodiesel (B30) program, which is expected to offset lower domestic demand for palm-oil based groceries, similar data reveal. “We absolutely cannot export biodiesel this year,” said Gapki secretary-general Togar Sitanggang at a discussion hosted by MarkPlus on Sept 1. Palm oil, which is Indonesia’s second biggest export behind coal, is regularly touted as a solution to the country&rsq...