The Advantages of Palm Oil Compared to Other Vegetable Oils

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Viva Budy Kusnandar 26/04/2022 12:20 WIB

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The Advantages of Palm Oil Compared to Other Vegetable Oils

Land Area Required for the Production of 1 Ton of Vegetable Oil (2021)

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The Advantages of Palm Oil Compared to Other Vegetable Oils

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Land Area Required for the Production of 1 Ton of Vegetable Oil (2021)

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From a production standpoint, palm oil is the most superior vegetable oil-producing plant compared to other plants.

According to the Ministry of Industry's report entitled *Challenges and Prospects of National Palm Oil Downstreaming*, only 0.3 hectares (ha) of land are needed to produce 1 ton of crude palm oil (CPO).

In comparison, 1.3 ha of land is needed to produce 1 ton of rapeseed oil.

Meanwhile, producing 1 ton of sunflower oil requires 1.5 ha of land, and 2.2 ha of land is needed for 1 ton of soybean oil.

Thus, the land productivity of palm oil plantations is much higher than that of other vegetable oil-producing plantations.

Palm oil also plays an important role in the national economy and is one of the largest foreign exchange earners for Indonesia.

Amid the Covid-19 pandemic, palm oil exports contributed US$28.52 billion in export revenue in 2021.

This value accounts for 13.01% of Indonesia's total non-oil and gas export value, the largest compared to other non-oil and gas export commodities last year.

However, the Ministry of Industry assesses that there are still several challenges in the development of the palm oil industry in Indonesia, including:

1. Upstream Challenges:

* The productivity of palm oil is still relatively low because most of it comes from smallholder plantations.
* Palm oil plantations are very extensive, and some need replanting because many of the plants are old.
* Issues of environmentally unfriendly palm oil plantations.
* Sustainability challenges related to the moratorium on peatland permits.
* Many overlapping regulations/policies.
* International trade barriers (tariff and non-tariff) and negative campaigns about palm oil.

2. Downstream Challenges:

* There is an assumption that the return on investment (ROI) of the palm oil downstream industry is relatively smaller than that of the upstream industry.
* The quality of processing technology is still relatively simple, and expert human resources in the field of palm oil are still limited.

Currently, the national palm oil industry is also facing a new challenge in the form of a ban on the export of cooking oil and palm oil derivative products that are its raw materials.

The export ban is implemented to overcome the scarcity and price increase of cooking oil in the market and will be effective starting April 28, 2022.

(Read Also: Export Ban, These Are the 10 Companies with the Largest Palm Oil Plantations in Indonesia)

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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The Advantages of Palm Oil Compared to Other Vegetable Oils

The Advantages of Palm Oil Compared to Other Vegetable Oils

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The Advantages of Palm Oil Compared to Other Vegetable Oils

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