Jakarta –
The Indonesian Palm Oil Entrepreneurs Association (Gapki) responded to President Prabowo Subianto’s plan to boost biodiesel or palm oil mixed fuel. Not only B35, Prabowo is said to be developing up to B50 and B60.
Gapki General Chair Eddy Martono sees this program as an opportunity to optimize the People’s Palm Oil Rejuvenation (PSR) program. Eddy also believes that the government will not be careless in implementing the biodiesel program as long as palm oil production remains stagnant.
“I am very confident that the government will not be reckless in implementing B50 as long as production is still stagnant,” he said in a press conference at the Gapki Head Office in Central Jakarta, Tuesday (22/10/2024).
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The reason is, the biodiesel program could sacrifice Indonesian palm oil exports if it is not calculated properly. In the end, the country’s foreign exchange will also decrease.
“What will be sacrificed, that’s right, will definitely be exports. Second, what will happen with exports, export foreign exchange. The third is who will finance the B50? If there are not enough exports, for example B35 is currently financed from export levies,” he explained.
The results of the calculations are that if B50 is implemented with the current conditions of the palm oil industry, the amount of exports will decrease by 6 million tons. Then, if B60 is implemented then exports will fall by 10 million tons.
“Once again I believe that the government will not be careless as long as production is insufficient. With B40 alone, if this is implemented, our exports will fall by 2 million tonnes. Then if we impose B50, our exports will fall by 6 million tonnes from the average of 30 million tons,” he explained.
Apart from that, it is also necessary to pay attention to the potential for inflation if the supply of Indonesian palm oil exports to the global market decreases. In the end, said Eddy, Indonesia will also be affected.
“Third, if our supply decreases to the world, prices will definitely also rise, the world price of vegetable oil. In the end, it will also have an impact on inflation for us because all palm oil products will be expensive,” said Eddy.
Meanwhile, CPO (Crude Palm Oil) production in August 2024 reached 3,986 thousand tons, up 10.2% compared to production in July of 3,617 thousand tons. Likewise, PKO (Palm Kernel Oil) production rose to 391 thousand tons from 344 thousand tons in July.
As of August, production in 2024 was 34,522 thousand tons or 4.86% lower than the same period in 2023, namely from 36,287 thousand tons. Total domestic consumption rose 30 thousand tons from 2,030 thousand tons in July to 2,060 thousand tons in August 2024.
For food consumption purposes, it rose by 88 thousand tons, and for oleochemicals it fell by 2 thousand tons, while for biodiesel it fell by 56 thousand tons from 1,035 thousand tons to 979 thousand tons. On a YoY basis until August, domestic consumption in 2024 reached 15,571 thousand tonnes or 1.94% higher than in 2023 of 15,274 thousand tonnes.
Consumption for food reached 6,665 thousand tonnes or 4.51% lower than last year’s 6,980 thousand tonnes, oleochemicals 1,484 or 1.85% lower than the previous year’s 1,512 thousand tonnes, while biodiesel reached 7,421 thousand tonnes, 639 thousand tonnes higher. (9.42%) higher than the previous year of 6,782 thousand tons.
Total exports increased from 2,241 thousand tons in July to 2,384 thousand tons in August or an increase of 6.35%. The increase occurred in processed CPO products which rose by 79 thousand tons to 1,668 thousand tons in August, followed by CPO which rose by 48 thousand tons to 222 thousand tons, and oleochemicals which rose by 41 thousand tons to 440 thousand.
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(ily/rrd)
Indonesia’s Biodiesel Ambitions: Hot Air or Smart Moves?
Well, well, well! It seems President Prabowo Subianto has decided to put the pedal to the metal with his plans for biodiesel. It’s like the guy who made the leap from a bicycle to a motorcycle, but in this case, we’re talking about palm oil mixed fuel. Forget about just B35—now we’re flirting with B50 and B60! What’s next? B100? At that point, we’re just pouring coconut oil in the tank and hoping for the best!
The Indonesian Palm Oil Entrepreneurs Association, known by the snazzy acronym Gapki, has leapt into action like a cat on a hot tin roof. Their General Chair, Eddy Martono, wants to assure us that while this fuel initiative sounds great and all, authorities are checking their calculators before engaging the turbo boost. After all, if the production is as stagnant as the traffic in Jakarta during rush hour, we might be in for a bumpy ride.
Eddy’s got the numbers to back up his concerns. Apparently, if we roll out B50, we could see exports dipping by around 6 million tons. And if that rocket fuel gets blasted into B60 territory? Say goodbye to another 10 million tons of palm oil going overseas. It’s enough to get exporters sweating more than a politician at a lie detector test!
But here’s where it gets tricky! If Indonesia starts limiting its palm oil exports, we might see inflation creeping up faster than a teenager escaping a family dinner. Eddy warns that if supply drops, prices will skyrocket, and suddenly, all things palm oil are about as affordable as a date with a Kardashian. With the world’s appetite for vegetable oil surging, we could be throwing a wrench in the works of both foreign exchange and local wallets.
The tangled web of numbers doesn’t stop there. Eddy detailed the current CPO production in August 2024—a significant bump up from July but still a dip from last year. It’s the classic story of “we’re doing better than last month, but let’s not look at last year’s performance!” We need to applaud our CPO production team, who’ve apparently decided that August was the time to strut their stuff, reporting a solid 3,986 thousand tons—up 10.2%! Cue the confetti!
Yet it appears we’re still flirting with a slight downturn, positioning production in 2024 as 4.86% lower than last year. Domestic consumption is dancing back and forth. Increases here, decreases there—much like my gym attendance this past year. So, while we’re shipping out more processed products—an increase of 6.35% in exports from July to August—some sectors are trying to keep up the pace.
In short: Prabowo’s pushing for bold moves, Eddy’s calculating the potential potholes, and the rest of us are left holding our breath. Will this fuel splurge light up the way to economic prosperity or crash harder than a first date at a karaoke bar? Keep your eyes peeled, folks. This biodiesel saga is just revving up.
(ily/rrd)
