Comparison Palm Oil Industry in Indonesia

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As the comparison Indonesia Palm Oil industry, the evolution of the palm oil industry in Indonesia can be divided into three phases, namely the core development phase, the revival phase and the autonomous development phase.

The first palm oil factory in Indonesia was built in 1919 in Tanah Hitam Ulu. The first exports of Crude Palm Oil (CPO) were registered in 1919 at a volume of 576 tons. The volume of exports continued to increase in line with increased area of the plantations. So, in 1937, the CPO production in Indonesia constituted 40 percent of the global production, putting Nigeria in second place. (Van Heurn, 1948 in Saragih, 1980). In 1937 Indonesia was the largest palm oil manufacturer in the world for the first time.

Until nowadays, the production and area of Palm Oil in Indonesia keep increasing (See figure 1) . By the increment of  production and area of Palm Oil, the availability of this product will be fullfilled.

Development of areas and production of palm Oil in Indonesia

Figure 1. Development of areas and production of palm Oil in Indonesia

Oil palm is the most efficient oilseed crop in the world. One hectare of oil palm plantation is able to produce up to ten times more oil than other leading oilseed crops.

Oil palm efficiency vs other major oil crops

Figure 2. Oil palm efficiency vs other major oil crops

Among the 10 major oilseeds, oil palm accounted for 5.5% of global land use for cultivation. Indonesia and Malaysia produce about 85% of the world’s palm oil. Other producer countries include Thailand, Columbia, Nigeria, Papua New Guinea and Ecuador.

major oils & fats - global production in 2012 - source oil worlds 2013

Figure 3. major oils & fats – global production in 2012 – source : oil worlds 2013

Palm oil is one of the 17 major oils and fats produced globally. China is the largest consumer of oils and fats, followed by the EU, India, and the United States. As it can be seen in the grapgh, China has the highest point as compared to others.

per capita consumption of oils & fats, 2012 - oil world 2013

Figure 4. per capita consumption of oils & fats, 2012 – source: oil world 2013

Among the 17 oils and fats, palm oil was the highest consumed oil in 2012, reaching three billion people in 150 countries. Othes are followed by soybean oil, rapessed oil, which is relatively higher price than palm oil. High palm oil consumption countries include China, India, Indonesia, and the European Union. Global consumption for palm oil was 52.1 million tonnes in 2012.

17 major oils & fats - world consumption in 2012 - source oil world 2013

Figure 5. 17 major oils & fats – world consumption in 2012 – source :oil world 2013

17 major oils & fats world export in 2012 - source oil world 2013

Figure 6. 17 major oils & fats world export in 2012 – source oil world 2013

Palm oil is competitively priced against soybean, rapeseed and sunflower oil in the world‘s market for oils and fats. Based on those data, palm oil is having big potential to be enlarge.

comparison of prices of major vegetable oils from 2001 to 2013 - source oil world 2013

Figure 6. comparison of prices of major vegetable oils from 2001 to 2013 – source oil world 2013

China and India are the countries which consume nearly 60 percent of CPO from Indonesia to satisfy the growing consumption accompanying economic growth over the last decade. Global CPO prices are generally lower than the price of soybean, rapeseed, and sunflower oil and give benefits to both these countries with their population of almost 50 percent of world population.

Main Consuming Countries of Indonesian CPO

Table 1. Main Consuming Countries of Indonesian CPO

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