Indonesia, the world’s largest palm oil producer, will only export a maximum 50% of its total crude palm oil (CPO) production by 2015 as the country’s oil palm plantation areas are diminished.
PT Bakrie Sumatera Plantations president Ambono Janurianto said Indonesia, which previously had ceiling growth of 300,000 ha per year for oil palm plantation, had scaled down to 200,000 ha per year since 2009.
“Also by 2020, the maximum CPO export will be further reduced to 30% of total production. Indonesia’s low capacity utilisation of downstream processing will not sustain current CPO exports. The refining capacity is only at 60% now as the margin is still low.
“As we are the main palm oil producer, these developments must be part of future planning (by CPO importers),” he said in a paper titled Indonesia palm oil industry: impact on world oil supply and demand presented at the 21st Palm and Laurics Oil Conference and Exhibition: Price Outlook 2010/2011 (POC 2010).
Indonesia’s major CPO importers are China, India and Europe.
“High economic growth will result in the change of consumer consumption behaviour that will increase the consumption of oil and fats per capita,” he said.
But Ambono reiterated that Indonesia would still be a major contributor to influence supply and demand equilibrium of vegetable oils.
In an interview with Reuters, Ambono said PT Bakrie expected its palm oil sales volume to grow 32% this year as acquisitions started contributing to sales.
“Our target is to increase sales to 370,000 tonnes this year from 280,000 tonnes last year.” he said.
Bakrie Sumatera, which also has rubber operations, would start generating sales from is oleochemicals business this year after the US$200mil acquisition of Domba Mas, he said.
“Domba Mas has one of the biggest oleochemical facilities in one location. It is an integrated one and has the capacity to produce 150,000 tonnes of fatty alcohol,” he said.
The plant is located in Kuala Tanjung in North Sumatra.
Bakrie Sumatra raised funds from a 4.9 trillion rupiah (US$533.2mil) rights issue for the acquisition, of which 1.3 trillion rupiah was subscribed by parent firm PT Bakrie Brothers, said Ambono.
Meanwhile, Bernama reported that Bursa Malaysia planned to trade metal and add new specifications for CPO on Bursa Suq Al-Sila’ this year, as volume was expected to surge on local and foreign interest.
Raja Teh Maimunah Raja Abdul Aziz, Bursa Malaysia’s global head of Islamic markets, did not discount the possibility the daily trading volume on Bursa Suq Al-Sila’ would triple or quadruple this year due to higher participation by local and foreign banks especially from Gulf Cooperation Council.
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