Riset Perkebunan Nusantara, a state-owned research firm, expects Indonesia's crude palm oil (CPO) production to drop 4.2 percent (y/y) to 32 million tons in 2016. The firm further adds that in 2015 Indonesia had a total of 11.3 million hectares of palm oil plantation, consisting of plantations owned by the state (750,000 hectares), plantations owned by the private sector (5.97 million hectares) and plantations owned by smallholders (4.58 million hectares). The palm oil sector is one of Indonesia's key foreign exchange earners. Indonesia is the world's largest producer and exporter of palm oil, followed by Malaysia.
Update COVID-19 in Indonesia: 3,372,374 confirmed infections, 92,311 deaths (30 July 2021)
30 July 2021 (closed)
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Today's Headlines Moratorium
On Wednesday (13/05), Indonesian President Joko Widodo showed his commitment to protect Indonesia’s biodiversity-rich environment as he extended the moratorium on the clearing of primary forest and peat-land by another two years. This moratorium, which had been first implemented by Widodo’s predecessor Susilo Bambang Yudhoyono in May 2011, aims to combat rapid deforestation in Southeast Asia’s largest economy. Furthermore, the Ministry of Environment and Forestry will study how it can further strengthen the moratorium.
Indonesia’s production of crude palm oil (CPO) is estimated to reach 31 million tons this year, up from an expected 29.5 million tons in 2014, according to the Indonesian Palm Oil Board (DMSI). Similar to last year, CPO production growth is limited due to unconducive weather conditions in the world’s largest producer and exporter of palm oil. Moreover, old trees have become less productive, while the younger generation of planted trees have not yet reached an optimal production age.
Business players within Indonesia's palm oil sector have expressed concern about a recently introduced law that stipulates limits to plantations sizes, including oil palm plantations. The government of Indonesia issued law Permentan No 98/Permentan/OT.140/9/2013 that sets maximum boundaries to the surface area of eleven commodities. The palm oil industry of Indonesia now argues that targets mentioned in the country's palm oil roadmap cannot be met. For example, the production target of 40 million tons of palm oil by 2020 is in jeopardy.
Latest Columns Moratorium
Indonesia's Ministry of Energy and Mineral Resources will soon issue a moratorium on new coal mining concessions. This moratorium will be implemented after the issuance of a planned presidential instruction regarding a five-year moratorium on new palm oil plantation concessions. Heriyanto, Head of the Legal Department Directorate General of Minerals and Coal at the Energy Ministry, emphasized that the moratorium in Indonesia's mining industry only involves coal, not the mining of minerals.
Although development of the 17 artificial islands off the coast of Indonesia's capital city of Jakarta has been suspended (for six months) due to alleged violations of and/or hiatuses in Indonesian law, Jakarta Governor Basuki Tjahaja Purnama (known as Ahok) says he is certain that the ambitious land reclamation project will be continued after the moratorium. The construction of these 17 artificial islands is a project that is separate from (but highly integrated with) the central government's National Capital Integrated Coastal Development (NCICD) plan, better known as the Great Garuda.
Indonesian President Joko Widodo has ordered the nation's Minister of Environment and Forestry Siti Nurbaya to issue a moratorium on new palm oil concessions in a number of provinces. Although Widodo wants Indonesia - the world's top producer and exporter of crude palm oil (CPO) - to raise CPO output, he believes this increase can be achieved by increasing productivity of existing palm oil plantations, not by adding new plantations. Indonesia is often criticized by environmentalist groups for its forestry policies and poor law enforcement (which led to the severe haze that spread through Southeast Asia last year).
Last week, president Susilo Bambang Yudhoyono extended the moratorium on new permits to convert natural forests and peat lands for a further two years. In 2011, Indonesia's government signed the two-year primary forest moratorium that came into effect on 20 May 2011 and expired in May 2013. This moratorium implies a temporary stop to the granting of new permits to clear rain forests and peat lands in the country. The moratorium particularly aims to limit Indonesia's quickly expanding palm oil industry.
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