ID :
29690
Tue, 11/11/2008 - 23:37
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http://m.oananews.org//node/29690
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CPO PRODUCERS READY TO EXPORT LESS IF PLANTATIONS REVITALIZED
Jakarta, Nov 12 (ANTARA) - Crude palm oil (CPO) producers plan to lower their export target to 11 million tons in 2009 if the plantation revitalization program is realized and the regulation on mandatory use of biofuels is implemented soon, a spokesman said.
"If we rejuvenate 300,000 to 500,000 hectares of oil palm plantations every year, we will cut supply by around 1.5 million tons. When consumption of biodiesel reaches around 2.5 million tons, we will be able to reduce our exports by up to around 4 million tons," the chairman of the Association of Palm Oil Producers (Gapki), Akmaluddin Hasibuan, said here on Tuesday.
He said initially Gapki expected next year's crude palm oil (CPO) production to reach 18 to 19 million tons but if the rejuvenation program was successful, production could drop to 17 million tons.
He said the domestic demand reaching around five million tons could still be met including for biofuel supply reaching around 2.5 million tons.
"Total domestic consumption reaches around seven million tons while supply for exports could be reduced to 10 to 11 million tons," he said.
The drop in the CPO exports is expected to be able to increase the CPO price, which had slumped to around US$525 per tons now, to US$600 to US$700 per ton, he said.
"If the rejuvenation program could be implemented early next year the price could reach US$600 per ton, " he said.
The executive director of the Association of Indonesian Biofuel Industries (GIMNI), Sahat Sinaga, said that next year's CPO exports would drop also because of current tight liquidity condition following the current global financial crisis.
"This year's exports reach 12 million tons but next year they are expected to drop to 11 million tons," he said.
He said that GIMNI members had reviewed their contracts particularly with buyers from China and India. "We are trying to seek negotiations for price adjustment," he said.
He said if the process of re-negotiations failed to produce a satisfying deal only then would exporters bring their case to the international arbitration and start seeking a legal process for cancellation of export contracts.
"If that happens we will ask the government to lobby the Indian government to hinder the process," he said.
Akmaluddin said 35 percent of 6.2 to 6.7 million hectares of oil palm plantations in Indonesia belonged to the people and around 60 percent of the plantations were old and needed rejuvenation.
"The problem is it is difficult for them to get bank loans for it as the business is high risk moreover if it is not guaranteed," he said.
He said the cost of rejuvenation reached around Rp27 million per hectare which was certainly a lot for the people.
In the case of Gapki members rejuvenation is done regularly by each member company, he said.
Sahat suggested that Indonesia followed the Malaysian program which was financed by the government. He said the Malaysian government provided 1,000 ringgit for a hectare of plantations to be rejuvenated so that production remained high when the price was up.
In 2008 the target of extension of oil palm plantations in the country was set by the ministry of agriculture at 350,000 hectares while rejuvenation at 50,000 hectares, he said.
He said total funds for the revitalization of plantations reached Rp5.5 trillion covering 158,917 hectares for cacao, oil palm and rubber farmers in seven provinces.
Until April 2008 a total of Rp2.9 trillion had been disbursed with areas being revitalized to reach 131,428 hectares. The funds for rejuvenation are extended in the form of soft loans to farmers holding a maximum of four hectares of plantations.
He said 13 banks have been committed to support with funds totalling Rp46 trillion and an interest rate of 10 percent a year.
The government has also given an interest subsidy until the plantations start producing reaching a maximum of five percent for oilpalm and cacao plantations and a maximum of seven years for rubber plantations.
"If we rejuvenate 300,000 to 500,000 hectares of oil palm plantations every year, we will cut supply by around 1.5 million tons. When consumption of biodiesel reaches around 2.5 million tons, we will be able to reduce our exports by up to around 4 million tons," the chairman of the Association of Palm Oil Producers (Gapki), Akmaluddin Hasibuan, said here on Tuesday.
He said initially Gapki expected next year's crude palm oil (CPO) production to reach 18 to 19 million tons but if the rejuvenation program was successful, production could drop to 17 million tons.
He said the domestic demand reaching around five million tons could still be met including for biofuel supply reaching around 2.5 million tons.
"Total domestic consumption reaches around seven million tons while supply for exports could be reduced to 10 to 11 million tons," he said.
The drop in the CPO exports is expected to be able to increase the CPO price, which had slumped to around US$525 per tons now, to US$600 to US$700 per ton, he said.
"If the rejuvenation program could be implemented early next year the price could reach US$600 per ton, " he said.
The executive director of the Association of Indonesian Biofuel Industries (GIMNI), Sahat Sinaga, said that next year's CPO exports would drop also because of current tight liquidity condition following the current global financial crisis.
"This year's exports reach 12 million tons but next year they are expected to drop to 11 million tons," he said.
He said that GIMNI members had reviewed their contracts particularly with buyers from China and India. "We are trying to seek negotiations for price adjustment," he said.
He said if the process of re-negotiations failed to produce a satisfying deal only then would exporters bring their case to the international arbitration and start seeking a legal process for cancellation of export contracts.
"If that happens we will ask the government to lobby the Indian government to hinder the process," he said.
Akmaluddin said 35 percent of 6.2 to 6.7 million hectares of oil palm plantations in Indonesia belonged to the people and around 60 percent of the plantations were old and needed rejuvenation.
"The problem is it is difficult for them to get bank loans for it as the business is high risk moreover if it is not guaranteed," he said.
He said the cost of rejuvenation reached around Rp27 million per hectare which was certainly a lot for the people.
In the case of Gapki members rejuvenation is done regularly by each member company, he said.
Sahat suggested that Indonesia followed the Malaysian program which was financed by the government. He said the Malaysian government provided 1,000 ringgit for a hectare of plantations to be rejuvenated so that production remained high when the price was up.
In 2008 the target of extension of oil palm plantations in the country was set by the ministry of agriculture at 350,000 hectares while rejuvenation at 50,000 hectares, he said.
He said total funds for the revitalization of plantations reached Rp5.5 trillion covering 158,917 hectares for cacao, oil palm and rubber farmers in seven provinces.
Until April 2008 a total of Rp2.9 trillion had been disbursed with areas being revitalized to reach 131,428 hectares. The funds for rejuvenation are extended in the form of soft loans to farmers holding a maximum of four hectares of plantations.
He said 13 banks have been committed to support with funds totalling Rp46 trillion and an interest rate of 10 percent a year.
The government has also given an interest subsidy until the plantations start producing reaching a maximum of five percent for oilpalm and cacao plantations and a maximum of seven years for rubber plantations.
