Palm oil industry: Sustainability becomes the main issue

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Bisnis Indonesia - Industri sawit: Keberlanjutan jadi isu utama

15 August 2023

By: Affifah Rahmah Nurdifa

Jakarta - Palm Oil Agribusiness Strategic Policy Institute (PASPI) encourages the palm oil industry to adopt the concept of sustainability in its operations to enter the tight competition in the global market. 

Chairperson of PASPI Supervisory Board Bungaran Saragih stated that, although palm oil is more reliable in terms of price competition, the non-price competition (NPC) in the market is getting tighter. 

“The NPC issue used against palm oil is the issue of sustainability. This includes economic, social, and environmental sustainability. We agree that this nation is committed to achieving sustainability,” he said at the Palm Oil Advocacy event in Jakarta on Monday (14/8). 

Bungaran said that the number of business players in the palm oil industry that have Indonesia Sustainable Palm Oil (ISPO) certification is not few. 

Therefore, he again encouraged all stakeholders in the palm oil industry to adopt this concept. 

According to him, the palm oil industry has become the saviour of the national economy after the Covid-19 pandemic. This is reflected in the contribution of palm oil to the national foreign exchange income, which reached US$50 billion last year. 

He explained that the income came from exports of local palm oil products worth US$39 billion and foreign exchange savings from the mandatory biodiesel policy of around US$10.3 billion. 

“Overall, the palm oil industry contributed almost US$50 billion in foreign exchange. There is no other commodity like that,” he said. 

In terms of employment, he added, the palm oil industry has employed 16.5 million workers, including 2.5 million farming households. 

He said that there are 70 million Indonesian citizens whose economy is tied to this industry. 

“Palm oil has contributed greatly to creating the trade balance surplus that we have enjoyed in the last 3 years, especially during Covid-19,” he said. 

Beyond that, the former Agriculture Minister for the 2000–2004 period also revealed the contribution of the national palm oil industry in the global sphere. 

Indonesia was the largest palm oil producer in 2006 and dominated the global vegetable oils. 

He believes that Indonesia’s title as a global palm oil producer has brought new dynamics to the world vegetable oil market, with palm oil prices being more competitive compared to other vegetable oils.