Indonesia and Malaysia agreed to visit the European Union with the joint mission of communicating the deforestation-free commodity regulations for the palm oil sector.
The administration looks adamant in gradually stopping the export of raw materials and encouraging domestic processing industry.
Indonesian authorities shared the optimism that the recently ratified Indonesia-Korea Comprehensive Economic Partnership Agreement (IK-CEPA) will back domestic industries, including the downstream sector.
TheIndonesia.id - The Indonesian government has recently reiterated the commitment to stop the export of raw materials, including crude palm oil (CPO), as it pushes for the production of value-added products to support national economy.
Minister of Industry Agus Gumiwang Kartasasmita said Indonesia has been working to boost the processing of CPO to products with added value as an effort to improve its contribution to domestic economy.
“As instructed by President Joko Widodo, Indonesia must stop the export of CPO so that the commodity can be processed into value-added derivative products,” Kartasasmita said on Thursday, March 10, as reported by Antara.
He said his Ministry continues the effort to strengthen the structure of manufacturing industry, including through the development and promotion of downstreaming policy.
“So far, downstream is beneficial to add value to national economy, including in increasing investment, labor absorption, and accelerating growth of domestic manufacturing industry,” the Minister explained.
Data shows that in 10 years, the export of palm oil derivatives significantly increased, from 20 percent in 2010 to 80 percent in 2020. And currently, there 168 are derivative products that are produced in Indonesia, including for food, phytopharmaceuticals, chemicals, and fatty acid methyl ester (FAME).
Director general of agro industry at the Ministry Putu Juli Ardika confirmed that the palm oil processing industry has been performing well and is hugely influential to national economy. It contributed 17.6 percent to the total non-oil and gas export in 2021.
“In 2020, the export value of palm oil products amounted to US$19.89 billion, and it increased by 56.63 percent in 2021,” Ardika explained.
Furthermore, the palm oil processing industry is also labor intensive and has absorbed 4.2 million of direct labors and around 12 million of indirect labors.
