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Palm oil industry in Indonesia.

Backgrounds

Indonesia crude palm oil (CPO) industry has grown fast in the past years. In 2010, the country CPO production totaled 21.0 million tons from 19.4 million tons in the previous year. In 2011, the production is forecast to rise further 4.7% to 22 million tons. Meanwhile, exports totaled 15.65 million tons in 2010 to rise to an estimated 18 million tons in 2011. Indonesia has become the world's largest producer of CPO with production reaching 21.0 million tons in 2010. Only 25% or 5.45 million tons of the production is predicted to be disposed of on the domestic market. The country is still seeking to expand its export market for the commodity and increase sales such as to Pakistan, Bangladesh, and East Europe and China.

The country's CPO production has grown from year to year as lands are available for the expansion of its oil palm plantations reaching 7.5 million hectares in 2010. The government encourages development of the industry by supporting in the development of infrastructure. The government is building industrial clusters for palm oil-based industries in the northern coats of Java, eastern coast of Sumatra, East Kalimantan, Sulawesi and Merauke.

In 2011, the Association of Palm Oil Companies (Gapki) decided to withdraw from Roundtable Sustainable Palm Oil (RSPO) and instead joined the Indonesian Sustainable Palm Oil (ISPO) obligatory in 2012.

Development of the country CPO industry is still facing hurdles mainly in road infrastructure to facilitate transport from the plantations to seaports. The government has promised to improve or build infrastructure in CPO production centers in Indonesia. Another problem is slow development of CPO processing industry and upstream CPO industries producing CPO derivatives like fatty acid, fatty alcohol, glycerin, methyl ester. So far the country has not made full use of its abundant availability of CPO to feed downstream industries. The country has produced only a few number of downstream palm oil products including surfactant, pharmaceuticals, cosmetics, and organic base chemicals, etc.

Industrial Structure

Oil palm plantations and owners

In the past 10 years, the oil palm plantations in Indonesia expanded 8% a year--from 5.45 million hectares in 2005 to 7.82 million hectares in 2010.

The expansion was faster as from toward the end of the 1980s when the private sectors began to enter the plantation business in large scale. Earlier state companies dominated oil palm plantations.

The rising prices of crude palm oil attracted big investors and many farmers also began to grow the crop. In the beginning farmers were involved in this business as plasma farmers in cooperation with big investors under the nucleus smallholder's scheme. Later more farmers grew the crop outside the nucleus smallholder scheme.

Currently private plantation companies dominate oil palm plantations in the country. In 2010, plantations owned by private companies made up 49.75% or around 3.89 million hectares of the country's total oil palm plantation areas of 7.82 million hectares with smallholders' plantations making up 42.35% or 3.31 million hectares with sate plantations making up the rest or 7.9%.

In the period of 2005-2010, the plantations owned by state company (PBN) expanded slowly by 3.3%. The plantations owned by private companies (PBS) grew faster by 10.3% a year and smallholders' plantations (PR) expanded by 8.13% a year.

Plantations dominated by foreign investors

Not all of the plantations areas, however, have been cultivated. In 2010, the country had 7.8 million hectares of oil palm plantation areas but only 5.7 million hectares if them were cultivated. Based on data at Gapki and the Forestry ministry, the country has 30 million hectares of land suitable for oil palm plantations mainly in Sumatra and Kalimantan.

Currently big investors in this sector are competing in securing more lands for expansion So far foreign investors mainly from already control around 2 million hectares of land for oil palm plantations. Based on data at Association of Indonesia Oil Palm Farmers (Apkasindo), by 2010, Malaysian investors had acquired 230 oil palm plantations in Indonesia. The foreign investors are large company group such as Golden Hope and Syme Darbi from Malaysia, and Wilmar Group from Singapore with concessions in Kalimantan and Sumatra .

More foreign investors are still eyeing concessions for plantations in the country where there are at least 30 million hectares of damaged forest lands that could be utilized to develop oil palm, rubber and sugar plantations.

However, in 2011, the Forestry Ministry cancelled the principle licenses for 3 million hectares of land reserved for 251 investors in oil palm plantation as they failed to implement their projects as scheduled. The government decided to hand over the lands to serious investors.

The minister for state enterprises also supports the plan of the forestry ministry to suspend issuing new license for foreign investment in the oil palm and rubber plantations.

Locations of plantations

Based on data at the plantation directorate general, oil palm plantations are located in 17 provinces in Sumatra, Java, Kalimantan, Sulawesi, Maluku and Papua. In 2010, Sumatra had the largest plantation areas making up around 76.46 % or 5.89 million hectares of the total areas of oil palm plantations in the country. By provinces, Riau has the largest area of 1.82 million hectares, followed by North Sumatra 1.31 million hectares.

Kalimantan had a total of 1.55 million hectares with the largest or 791,667 hectares in Central Kalimantan followed by West Kalimantan having 532,000 hectares.

Java has small plantation areas totaling only 35,993 hectares or 0.46% of the total areas in the country. The plantations are found only in West Java and Banten.

Main players in oil palm plantations

State companies lost their domination of oil palm plantations since 1990 to private companies which invested in big way in this thriving business. In 1997 especially after the regional monetary crisis that badly shook the country, Malaysian investors took advantage of the condition in the country to open new plantations and acquire existing plantations . Amid the crisis many plantation companies were facing financial problem forcing them to sell their assets including to Malaysian investors.

PT Astra Agro Lestari

PT Astra Agro Lestari (AAL) is subsidiary of the Astra Group. It is a holding company in the agribusiness division of the Astra Group. In 2004, PT AAL began to focus more expansion of its palm oil business and sold its non core business assesses.

AAL acquired 5,000-6,000 hectares of land a per year to be used for oil palm plantations. It also took big steps in replanting since 2009. Currently its oil palm trees average 16 years in age. Currently AAL is the largest listed oil palm plantation company in the country controlling 265,000 hectares of plantations. Around 77.3% or 204,845 hectares have been producing and the remaining 60,155 hectares with young crop are not yet ready for harvest .

In 2010, AAL's CPO production reached 1.1 million tons, up 2.8% from 1.08 million tons in the previous year. The CPO production was processed from 3.3 million tons of fresh fruit bunches (FFB) from its own plantations and from 906,000 tons of plasma farms' FFB and from 618,600 tons of FFB acquired from other companies.

In 2010, AAL built three new CPO processing plants including one in East Kalimantan with a processing capacity of 105 tons FBB/hour, one in Central Kalimantan with a processing capacity of 225 tons FBB/ hour and another one in South Kalimantan with a processing capacity of 30 tons FBB/hour. It also expanded the capacity of CPO processing plant in Riau with an investment of Rp 1.5 trillion to be completed in 2012.

Currently AAL has 22 units of CPO mill with total processing capacity of 1,050 tons of FFB per hour, an CPO refinery in North Sumatra with a capacity of 300 tons per day, one unit kernel processing plant with a capacity of 700 tons per day in Sumatra, Kalimantan, and Sulawesi

In 2011, AAL plans to build four CPO processing plants with a processing capacity of 5 tons of FFB per hour to cost around US$ 56 million. Two of the factories are to be built in East Kalimantan, 1 unit in South Kalimantan and another 1 unit in Central Sulawesi to be completed in 2014.

PT Asian Agri

PT Asian Agri (PT. AA) is a holding company for the agribusiness division of the Raja Garuda Mas Group having oil palm plantations in number of areas in Sumatra.

PT AA is a parent company for the Asian Agri Group, which includes AA Plantation I in North Sumatra. later the Asian Agri Group expanded to Riau and Jambi. It also cooperates with plasma farmers.

Currently Asian Agri has 28 oil palm plantations with 19 palm oil factories in North Sumatra, Riau and Jambi. The factories have the capacity to produce 1 million tons of CPO per year.

The Asian Agri Group through its subsidiary PT. Asianagro Agungjaya built a bio-diesel factory in Dumai, Riau with an investment of Rp 350 billion. The factory started operation in 2008 using CPO as the feedstock It has a production capacity of 200,000 tons per year in the first year of operation to be expanded gradually to 400,000 tons.

Asian Agri plans to build a bio-diesel factory in Marunda, Jakarta, with a capacity 200,000 tons per year. The factory will produce bio-diesel with a purity of 100% and could be used as an alternative fuel with mixture with oil.

Asian Agri has oil palm plantations in a number of provinces in North Sumatra, Jambi and Riau--totaling 160,000 hectares including 100,000 hectares of nucleus plantations and 60,000 hectares of plasma farms. Its total production capacity of CPO is 240,000 tons per month.

PT SMART

PT SMART Tbk operates an integrated palm oil industry from upstream to downstream. It operates oil palm plantations and production facilities for CPO and its derivatives such as cooking oil and other CPO derivatives.

The company is a subsidiary of the Sinar Mas Group and it has 102,556 hectares of oil palm plantations in 2005 in Sumatra and Kalimantan. Most or 91,500 hectares of its plantations have been productive and the rest with young crop have not been ready for their first harvest.

SMART has 12 units of palm oil processing plants with an annual production capacity 2.9 million tons CPO and 2 kernel processing plants with a production capacity of 200,000 tons of palm kernel oil (PKO) per year. In 2005, only three of the factories were operational in East Kalimantan and South Kalimantan with a total production capacity of 450,000 tons of CPO per year. PT SMART also has CPO refineries producing cooking oil with an annual production capacity 840,000 tons.

SMART has complied with the regulation of the Indonesia Sustainable Palm Oil USPO) effective as from March 2011 and the regulation will be obligatory for all oil palm plantation companies in 2014.

SMART sets aside up to Rp 1.1 trillion for capital expenditure in 2011, to be used to finance cultivation of new lands and replanting over 5,000 hectares of old plantations. In addition, SMART is building factories to increase its CPO n production capacity to 1.5 million tons per year.

SMART has 137,543 hectares of oil palm plantations in 2011 including 126,553 hectares already producing and 10,990 hectares have yet to start their first harvest. In 2011 until March, its FFB production reached 641,084 tons, including from plasma farms. Its CPO production totaled 162,087 tons and PKO production totaled 34,881 tons.

PT Bakrie Sumatra Plantation

In 2005, PT. Bakrie & Brothers Tbk of the Bakrie & Brothers Group increased its share in its subsidiary PT. Bakrie Sumatra Plantation by 28% from 28.41% earlier.

Later PT. Bakrie Sumatra Plantations acquired rubber plantations and processing factory from PT. Huma Indah Mekar in Lampung and an oil palm plantation and processing facilities from PT. Agro Mitra Madani in Jambi at a total price of Rp 140 billion. PT. Meanwhile, Bakrie Sumatra Plantations divested non productive assets including an oil palm plantation under PT. Patriot Andalas in West Kalimantan.

BSP agreed to cooperate with International Finance Corporation (IFC), a subsidiary of the World Bank to build oil palm plantations in West Africa with an investment of US$ 200 million to start in 2010.

BSP was eyeing a concession of 200,000 hectares in Africa, where concession could be effective for 100 years.

BSP sought to expand operation to Cambodia where it planned to open 10,000 hectares of oil palm plantations with an investment of US$ 30 million

BSP has issued bonds valued at US$ 25 million through its subsidiary BSP Finance BV. The bond carried a coupon rate of 10.75% with maturity in 2011 . It provided collateral with four subsidiaries PT Bakrie Pasaman Plantations, PT Agrowiyana, PT Agro Mitra Madani, PT Huma Indah Mekar, and PT Air Muring. Arch Advisory Limited was named as the advisor.

In late 2010, BSP through subsidiary PT. Flora Sawita Chemindo (PT. FSC) shipped its first export of stearic acid including 10 containers to China, 3 containers to o Syria, and 1 container to Iran, and 2 containers of glycerin to India, and 1 container of glycerin to Taiwan.

Stearic acid is a basic material and auxiliary material for rubber and tire industry, lubricants, detergent, electronics, and lastics. Glycerin is an auxiliary material in toothpaste, pharmaceutical, cigarette, cosmetic, soap and foodstuff industries. China is the largest buyer for its stearic acid paling, accounting for 40% of its exports followed by Europe accounting for 25%.

In 2010, BSP acquired the entire assets of the Domba Mas group at a price of Rp 2.06 trillion. The Domba Mas group had 3 subsidiaries Pt Flora Sawita Chemindo (FSC), PT Domas Agrointi Perkasa (DAP), and PT Domas Sawitinti Perdana (DSP). PT FSC had a total production capacity of 54,000 tons of fatty acid per year, consisting of 49,000 tons of stearic acid and 5,000 tons of glycerin per year. Its factory is located in Tanjung Morawa, Medan, North Sumatra. PT FSC started operation in 1998, but in 2007 it was forced to suspend operation. After the acquisition, BSP spent US$ 2 million on its renovation before resuming operation. Dap and DSP have a total production capacity of 50,000 tons of fatty acid per year and 132.000 tons of fatty alcohol per year.

PT ASD-Bakrie Oil Palm Seed Indonesia is a producer of oil palm seeds with a processing capacity of 20 million per year. The cultivation of seedlings, built with an investment of US$ 4.7 million started production in 1915. ASD-Bakrie plans to produce varieties of high yield seeds to turn out plants with a high productivity.

PT ASD Bakrie is a joint venture between BSP and Agricultural Service and Development LLC from Costa Rica.

In 2010, BSP expanded its oil palm plantations in Sumatra by opening 10,000 hectares of new plantations with an investment of US$ 25 million to be productive in 2013.

Currently BSP has 150,000 hectares of oil palm plantations and 117,118 hectares of rubber plantations located in various areas in North Sumatra, Riau, Jambi, South Sumatra and West Sumatra. BSP planned to expand the oil palm plantations to 200,000 hectares in 2014.

Its processing capacity in 2010 was 2.3 million tons of FFB per year with CPO production capacity of 174,417 tons in 2010.

PT Perusahaan Perkebunan London Sumatra Indonesia Tbk (Lonsum)

PT. Lonsum has the largest oil palm plantations located in North Sumatra, South Sumatra and East Kalimantan. After he process of restructuring in 2004, Lonsum resumed operation of its oil palm plantations in North Sumatra and processing industry in South Sumatra and East Kalimantan after being temporarily suspended The company made replanting over 14,000 hectares of plantations in South Sumatra.

In 2004, Robert Kuok Hock-Nien, a tycoon from Malaysia acquired part of the shares of PT Pan London Sumatra Plantation, which now holds 20.94% of the share of PT PP London Sumatra Tbk. (Lonsum). Kuok acquired the stake in Pan London Sumatra Plantation from Andre Pribadi, a younger brother of the owner of the Napan Group, Henry Pribadi.

In 2007, Lonsum was acquired by Indofood through PT Indo Agri Resources Ltd at a price of Rp 8.4 trillion. The acquisition was financed with a loan of US$ 25 million from ING, Standard Chartered Bank, Sumitomo Mitsui Banking, and Bank Central Asia.

It was reported then that the Salim family agreed to swap its television company PT Indosiar Karya Media Tbk with oil palm plantations of the Sariaatmaja family which also owns the TV stations of SCTV and O Channel.

Meanwhile PT Indo Agri owns an integrated industry with oil palm plantations and production facilities for CPO-based cooking oil, margarine, and shortenings with famous brands. Previously IndoAgri had 224,083 hectares oil palm plantation areas, and 74,878 hectares of which were already cultivated. With the acquisition, its oil palm plantations expanded to 387,483 hectares, of which 138,081 hectares were cultivated. Altogether plantations already cultivated totaled 165,000 hectares, including rubber plantations and other crops.

Lonsum has 38 plantations and 14 plasma plantations in Sumatra, Java, Kalimantan and Sulawesi totaling 99,386 hectares in 2011. Around 79% of the plantations have been cultivated with oil palm trees averaging 12 years in age, 18% cultivated with rubber trees and other crops .ESPO certificate has been granted for 38,000 hectares of the oil palm plantations with a CPO production of around 170,000 tons per year in North Sumatra.

Lonsum operates 11 factories including 4 units in North Sumatra, 6 units in South Sumatra, and 1 unit in East Kalimantan. The factories have a total processing capacity of 405 tons of FFB per hour. The factories have processing capacity ranging from 10 tons to 60 tons per hour each.

In 2011, Lonsum plans to expand its oil palm plantations by 3,000-4,000 hectares with an investment of Rp 400 billion.

PTP Nusantara IV

PT Perkebunan Nusantara (PTPN) IV (Persero) is a state company established in 1996 through a merger of a number of state plantations companies in North Sumatra including PTP VI, PTP VII and PTP VIII.

PTPN IV is the largest oil palm plantation owned by the state . It has 34 factories including 16 CPO factories with production capacity of 365,081 tons of CPO per year, 34,100 tons of Palm Kernel Oil per year, etc.

In 2007, PTPN IV expanded its plantations by taking over 20,000 hectares of plantation from PT Andalas Agro Nusantara in the regency of Mandailing Natal (Madina), North Sumatra. Around 9,000 hectares of the plantations are for plasma farms involving local farmers. Cultivation of the 20,000 hectares of land is expected to be completed in 2011 using seedlings from Guthrie Malaysia.

By 2010, PTPN IV had a total of 175,244 hectares of plantations including 135,198 hectares of oil palm plantations, and 4,398 hectares of tea plantations.

In 2011, PTPN IV sets CPO production target at 700,000 tons up 1.55% from 2010.

In 2011, PTPN IV sets aside Rp 2 trillion for capital expenditure including for the expansion of oil palm and tea plantations to cost Rp 511.024 billion, and house construction, procurement of machines, farm tools, construction of road, and irrigations to cost Rp 464.678 billion and other investment to cost Rp 100.477 billion.

Large plantation companies

Among large private oil palm plantations companies include PT Asian Agri and subsidiary which have a total area of 160,000 hectares in Sumatra, and PT Astra Agro Lestari (AAL), which has a total area of 265,000 hectares in Sumatra, Kalimantan and Sulawesi, PT SMART which has a total area of 137,574 hectares mainly in Sumatra and Kalimantan.

Among state companies is PTPN Nusantara IV which has a total area of 135,198 hectares mainly in North Sumatra.

Development of Production

CPO Production up 5.7% per year

Production has increased with the expansion of plantations mainly in Sumatra and Kalimantan and boosted by the commodity price hike in international market.

In 2007-2011 period, the country's CPO production grew 5.7% per year. In 2007, the CPO production reached 17.6 million tons, up to an estimated 22 million tons in 2011.

The increase in CPO demand that boosted production of that commodity is also attributable to development of bio-diesel industry using CPO as the feedstock

Private companies lead in production

In 2010, private plantation companies contributed 11.1 million tons t the country's total CPO production--up 8.8% from 10.2 million tons last year. The CPO production of private companies accounted for 52.9% of the country's total production of 21 million tons.

Smallholders' production totaled 7.2 million tons or 34.3% of the country's total production. State companies contributed only 12.8% or 2.1 million tons.

Indonesia and Malaysia world's largest

Malaysia and Indonesia dominate the world's production of CPO. In 2010, with total production of 21 million tons, Indonesia was the largest CPO producer in the world followed by Malaysia with production of 17.8 million tons. The world's production that year totaled 46 million tons. Indonesia and Malaysia, therefore, accounted for 84% of the production.

Indonesia's only rival but big one, therefore, is Malaysia. Over 10 year's earlier Malaysia was the largest producer although in the past five years, Indonesia has the largest plantations. Malaysian producers are more efficient and productive.

Indonesia, however, has taken the lead in production in he past three years although thanks largely to much wide plantations.

In 2010, Malaysia's oil palm plantations totaled 4.85 million hectares much smaller than Indonesia's oil palm plantations of 7.8 million hectares.

Technical aspect

Oil palm plantations

Oil palm trees grow well in tropical areas between 10 degree of north latitude and 10 degrees south latitude. Indonesia, Malaysia, Nigeria and Thailand are among tropical countries.

Oil palm trees grow well in loose soil, clayish soil and peat land with a depth of less than 1 meter. Peat land with a thickness of more than 1 meter, acid and swampy lands are not good for oil palm trees. However, with cultivation and irrigation system the plants could grow well in such lands.

Oil palm trees generally live for 20-30 years. hey start to yield fruits after they are four or six years old . Peak production is when they are seven to 11 years in age. Older than 11 years their productivity began to decline and after 20 years they no longer productive and replanting will be needed.

A bunch of fruits has up to 1,000 seeds. A bunch weights from 10 to 20 kg. A tree could yield a number of bunches in a year. A hectare is grown with 136-160 trees with a space of 8.5-9 meters. Production, therefore, could reach 10-30 tons of fresh fruit bunches depending in the quality of the seedlings. For example, the oil palm plantations of PT SMART produce up to 18.2 tons of fresh fruit bunches per hectare on the average. The production of trees aged between 7 and 18 years average 20-24 tons per hectare.

Management of Palm Oil

All parts of the fruits of oil palms could be processed to have commercial value. The fruits have meat and kernel that could be processed to turn out CPO. The fruit could be processed into palm kernel (PK). The meat CPO content is around 20% and the PK content of CPO is 2.5%. The fiber and the shell could be used as fuel for steam boilers.

Foodstuffs could be produced from CPO and PKO through process of refining, bleaching and deodorizing. CPO could be decomposed to turn out RBD Stearin and RBD Olein. RBD Olein is the feedstock for cooking oil and RBD Stearin is used mainly as feedstock for margarine and shortening, as well as soap and detergent.

Decomposition of CPO and PK could produce oleo-chemicals including fatty acid and glycerol. The refining production could produce olein making up 73%, stearin making up 21%, and PEAD (Palm Fatty Acid Distillate) 5% of the total production with waste 0.5%.

Process of Producing CPO

Fresh fruits have to be processed in 24 hours to produce CPO or their content will decline and free fatty acid could turn out to reduce the quality of CPO. Therefore, the processing factory must not be too far from the oil palm plantations.

In the CPO factory, the fruits are sterilized and kernels are separated from the fruits. The fruits are then pressed to extract CPO. The CPO is cleaned and distilled. Generally the fruits will have a 20% content of CPO. Therefore, a hectare of plantation could turn out from 2-7 tons of CPO. In 2010, Indonesia's oil palm plantations produced an average of 3.55 tons of CPO per hectare with the highest productivity recorded by plantations in Bengkulu averaging 4.0 tons per hectare a year.

The palm kernels already separated from the fruit seeds are sent to a palm kernel crushing plant which will turn out PKO making up 45% and palm kernel meal 55%.

An economic scale CPO mill has An FFB processing capacity of at least 30 tons per hour. However, currently there are CPO mills have been built with a processing capacity of 10 tons even 5 tons of FFB per hour.

Diagram--Process of producing CPO

Crude Palm Oil Milling Process

[ILLUSTRATION OMITTED]

Investment

Investment Interest Strong

The interest in investing in the palm oil sector has remained strong in the country especially among Malaysian investors. A number of new plantations have been built mainly in Sumatra, Sulawesi and Kalimantan.

Among the investors include Sime Darby Bhd from Malaysia through its subsidiary PT Golden Hope Nusantara, which plans to build a CPO processing plant with a processing capacity of 750,000 tons of FFB per year. The project is estimated to cost Rp936.97 billion to be built over a 6 hectares plot of land in Pulau Laut, South Kalimantan , to be operational in 2013.

Lestari Pasifik Berhad from Malaysia will team up with PT Inkud Exchange to build a bio-ethanol plant using palm oil waster as feedstock. They will build up to 316 units of factories with a production capacity of 6.5 million liters of bioethanol/year. The factories will be built over a period of five years with an estimated investment of US$ 350 million. The factories will be built near palm oil companies all over the country. Lestari Pasifik Bhd is the license holder for the palm oil waste processing technology of Mekano-enzimatik system a joint venture with Russian investor.

PT Citra Borneo Indah (CBI) plans to build 3 units of CPO factories with a processing capacity of 1 million tons of FFB a year to cost around Rp 300 billion to be operational in 2013.

PT Sampoerna Agro Tbk (PT SA) sets aside Rp 1 trillion for capital spending in 2011 to be used to expand cultivated land of oil palm plantations and to tend oil palm plantations. PT SA will expand cultivation by planting seedlings over 10,000 hectares land with an investment of Rp 500 billion. PT SA has 205,688 hectares of lands for oil palm plantations by March 2011, and 104,480 hectares of the lands have been cultivated.. Around 78,518 hectares of the plantations have been producing including 41,983 hectares of plasma plantations. The oil palm plantations are located in South Sumatra, Central Kalimantan, and West Kalimantan.

PT. SA has six CPO factories with a total processing capacity of 455 tons of FFB per hour. Five of the factories are located in Sumatra and one in Kalimantan. The company also has a palm kernel oil factory in Sumatra with a processing capacity of 150 tons of palm kernel per day.

In the first quarter of 2011, its production of FFB rose 101% to 383,673 tons from the same period in 2010. Its CPO production also increased 101% to 82,664 tons and its production of palm kernel rose 82% to 16,396 tons. Its sales of CPO surged 87% to 72,131 tons and sales of palm kernel oil shot up 86.4% to 18,061 tons. The selling price of CPO increased 27% to Rp 8,357 per kg, and the price of PKO rose 112% to Rp 6,675/kg.

Industrial and investment scale in palm oil industry

Each oil palm plantation has different characteristics, but based on the result of the analysis, the following data could be used as a reference.

A CPO factory to have an economic scale must have a processing capacity of at least 30 tons of FFB per hour. Based on the assumption that FFB has a CPO grade of21% and palm kernel grade of 5%, a CPO plant with a processing capacity of 30 tons of FFB per hour operating 4,500 hours per year, would produce 28,350 tons of CPO a year. If a hectare of oil palm plantation has a productivity of 3.29 tons of CPO a year, a factory with a processing capacity of 30 tons of FFB per hour would need 9,000-10,000 hectares of plantations. A hectare has from 136 to 160 oil palm trees, therefore, 1.25 million-1.5 million seeds would be needed to cultivate a plantation of 9,000-10,000 hectares.

Shortage in CPO factories

The rapid expansion of oil palm plantations especially smallholders' plantations and ones owned by private companies in the past 10 years has brought about problem in shortage in factories to process FFB into CPO and PKO.

In some areas such as in Sumatra factories have operated above their capacity. In North Sumatra FFB processing capacity have operated at 114% of their installed capacity, in West Sumatra 144% of their capacity, Lampung 116% of their capacity and in Bangka Belitung 179% of their capacity on the average.

In oil palm plantation centers in Indonesia, many investors have built factories without plantations. They rely mainly on smallholders' plantation for FFB supplies.

Each regional administration has different policy in the palm oil sector. In 2006, the West Sumatra provincial administration required all plantations companies to have their own FFB. The regulation was issued following shortage of FFB processing factories in that regions Now with new factories in operations the capacity is enough to process FFB from smallholders' plantations .Earlier many farmers could not find factories to process their FFB, therefore, they were forced to sell their FFB almost at any price dictated by the big companies which have processing factories.

In 2007, the number of FFB processing factories in the country reached 421 units with a processing capacity of 18,343 tons of FFB per hour. According to the secretary general of the Association of Indonesian Oil Palm Farmers (Apkasindo), in order to improve the productivity and competitiveness of farmers, an additional 100 units of FFB processing plants would be needed each with a processing capacity of 30 tons of FFB per hour. A factory is estimated to cost Rp 80 billion.

CPO trade

Exports

CPO is one of Indonesia's major export commodities. In 2006-2010, the country's exports of CPO grew form year to year both in volume and value--from 10.4 million tons valued at US$ 3.5 billion in 2006 to 15.6 million tons valued at US$ 7.6 billion in 2010.

Meanwhile, exports of PKO rose from 1.27 million tons valued at US$ 616,476 in 2006 to 2.53 million tons valued at US$ 216,955 in 2010.

According to the association of palm oil companies (GAPKI) exports of CPO in 2011 is expected to rise 14.96% to 18 million tons. Increase is expected to be sharper in the second half of the year. Increase is expected in exports to India, China, and Middle East as well as to Europe and the United States.

In 2010, the CPO exports rose in value from the previous year mainly on the commodity price hike. In 2010, according to the World Bank Commodity, the CPO price in the world market raised 41.2% to US$1,120 per ton in November form Us$ 793 per ton in January.

India the largest market

Indonesia has exported CPO to more than 150 countries in Asia, Europe, Africa and America. In 2010, exports totaled 15.6 million tons with the largest exports to India , the Netherlands and China.

Exports to India in 2010, reached 4.5 million tons. India needed 11 million tons of vegetable oils a year to feed its cooking oil factories.. Around 6 million tons of its requirements are produced locally in soybean oil, groundnut oil, corn oil and rice oil. The rest or 5 million tons is in CPO .

The second largest buyer was the Netherlands to which exports totaling 2.8 million tons. China was the third largest buyer to which exports reached 1.1 million tons in 2010.

Consumption growing

CPO consumption in the country is assumed to be equivalent to production plus imports minus exports or the same as domestic supply.

Domestic consumption is almost entirely supplied locally. Imports are insignificant; in volume. The largest consumer of CPO in Indonesia is cooking oil industry estimated to account for 80% of the domestic consumption. Other consumers are margarine/shortening, soap, and oleo-chemical industries. Consumption of CPO by non food industries averages only 700,000-800,000 tons a year.

In the period of 2006-2010, CPO consumption in the country fluctuated up to 6.8 million tons in 2006 from 1.5 million tons in the previous year. In the following year, the consumption shrank to 5.8 million tons in 2007, down again to 2.5 million tons in 2008. In 2009, the consumption increased again to 4.5 million tons and up again to 5.3 million tons in 2010.

PKO consumption rose from 1.4 million tons in 2005 to 2.2 million tons in 2007 and but shrank to 1.9 million tons in 2009 and to 1.6 million tons in 2010.

CPO prices in world and domestic markets

The price of CPO on the domestic market follows the trend in international market with the reference prices in Rotterdam, Kuala Lumpur Commodity Exchange (KLCE) and Chicago.

So far the CPO prices have a 10 year cycle. Growing demands in Europe, China and India, have pushed up CPO prices since 2007. In 2009, the price was Rp8,000 per ton and US$ 701-US$ 750/MT in Rotterdam.

Indonesia gained from the increase in the price of CPO since 2008 with the increase in its production of that commodity.

The CPO price in Rotterdam in 2007 was US$ 777 per ton, up to US$ 1,205 in 2010. In the first half of 2011 the price fell to US$1,095 per ton and that of PKO rose from US$ 600 to US$ 964.

The country's CPO exports rose from 14.9 million tons in 2009 to 15.6 million tons in 2010 and exports of PKO fell from 1.9 million tons in 2009 to 1.5 million tons in 2010.

Trade policy

Indonesia Sustainable Palm Oil (ISPO)

Based on a decision of the agriculture minister No.19/Permentan/OT.140/3/2011 March 2011, the government announced a regulation called Indonesia Sustainable Palm Oil (ISPO) The regulation came following the decision of GAPKI to withdraw from Roundtable Sustainable Palm Oil (RSPO) in 2010 ISPO will be obligatory for all oil palm plantation companies.

ISPO will be officially effective in March 2012. All oil palm plantation companies are required to fully implement ISPO and have the ISPO certificate before the end of 2014.

The agriculture ministry is to issue ISPO certificate for 20 companies a year starting in 2012.

ISPO is aimed at creating sustainability in CPO production and to support Indonesian commitment to reduce GRK emissions and unilateral commitment of the government in Copenhagen (2009) and program based on LOI Indonesia and Norway (2010).

Implementation of ISPO is important as palm oil sector is major export earner for the country and 3.9 million families have their livelihood in palm oil sector.

Export Reference Price (HPE) up

In May 2011, the government raised the export reference prices (HPE) for CPO and derivatives to follow the commodity price hike international markets.. HPE is set based on the average price in previous month in international market free on board (FOB) in several ports in Indonesia

Based on the regulation the HPE for fruits and kernels increased to US$ 658 per metric ton (MT), and those for CPO rose to US$ 1,073/MT, Crude Olein (CRD Olein) to US$ 1,148 per MT and Refined Bleached Deodorized Palm Oil (RBD PO) to US$ 1,879/MT, and Refined Bleached Deodorized Palm Olein (RBD Olein) to US$ 1, 150/MT.

Export taxes on CPO and derivatives are major contributors to the state income.

Policy in industrial sector

CPO clusters

The government will build five clusters for downstream palm oil industries to produce CPO derivatives including ole-chemicals such as fatty acid , fatty alcohol and glycerin and cooking oil.

The clusters will be built in palm oil production centers in northern coast of Java, eastern coast of Sumatra, Kalimantan, Sulawesi, and Merauke.

Indonesia, despite being the world's largest producer of CPO is still far lagging behind Malaysia in developing downstream palm oil industry. Indonesian plantations are also behind in productivity. Based on data from the agriculture ministry, the country has 7.9 million hectares of oil palm plantations with production of only 19 million tons of CPO. Malaysia which has only 4 million hectares of plantations produces up to 16 million tons of CPO a year.

Regional regulations hamper investment.

Regional administrations have issued regulations hoping to raise additional income from the plantation sector, but many of the regulations especially in district areas serve as a disincentive for investment. In South Sumatra, for example, a regional regulation imposes a levy of Rp 5 per kg of FFB.

Conclusion and Prospects

Indonesia took over from Malaysia as the world's largest CPO producers in 2006 mainly on expansion of plantations. From 2006 to 2010, the country expanded its oil palm plantations by 2 million hectares. In 2010, the country's CPO production reached 21 million tons, as against Malaysia's 17.8 million tons.

Currently Indonesia has around 7.8 million hectares of oil palm plantations. In 2011, the country's CPO production is forecast to rise to 22 million tons.

CPO demands in the world are expected to be stronger in 2012 on growing demands from India and China and shortfall in supply. In the first half of 2012, demand for CPO is expected to surge especially from the two countries . The prices of CPO in Rotterdam are predicted to reach US$ 1,210-US$ 1,242 per ton in 2012.

The strong market demand in the world market, has drawn many investors to the country seeking to venture in palm oil sector in the country. The government, however, encourages investment more in the downstream sector producing CPO derivatives like oleo-chemicals which have much higher commercial value. Prospects

CPO main feedstock for edible oil in the world

CPO has gained in the market and has been more competitive facing other edible oil feedstock such as soybean oil, and sunflower oil especially after it was found that CPO is safer that other feedstock of edible oils like soybean oil which has been fund to have trans fatty acid content hat could cause health hazard.

The rapid expansion of two largest developing economies in Asia- India and China- will also contribute considerably to growing demand for CPO. The two countries are major consumers of CPO. CPO would be the largest feedstock for edible oils in the world.

The CPO consumption has increased especially after the soaring prices of crude oil in the world. With oil prices reaching US$ 100 per barrel , CPO became more feasible to be used to produce bio-diesel.

Based on the trend in the past five years, the world's CPO consumption in the next five years is forecast to rise 6% a year--from 50.8 million tons in 2011 to 60 million tons in 2014.

Projection of Indonesia's oil palm plantations in size and CPO production

The country's production of crude palm oil (CPO) is feared to shrink 2 million tons in the next two years on restriction of plantation expansion. There is potential loss of 300-400 hectares of oil palm plantations until 2013 because of the moratorium on the use of forest and peat lands for oil palm plantations, while normally expansion could be as larger as 500,000-600,000 hectares.

The moratorium is based on an agreement with Norway in 2010 Under the agreement Indonesia was granted a compensation for US$ 1 billion.

Indonesia has around 21 million hectares of peat lands mainly in Kalimantan, Sumatra, and Papua. Around 33% of the peat lands are suitable for farm and plantation crops.

The losses in oil palm plantations would result in a decline in CPO production worth around US$ 2 billion on assumption that a ton of CPO is worth US$ 1,000. In addition, there is potential loss of investment in 200,000-300,000 hectares of oil palm plantations.

Now a hectare of oil palm plantation will need an investment of around Rp 60 million The decline in investment will also mean a potential loss of 60,000 jobs.

In 2011, the country has oil palm plantations estimated at 8.1 hectares, up to 8.7 million hectares in 2015. CPO production is estimated to reach 22 million tons in 2011, up to 30 million tons in 2015.
Table--1
Development of oil palm plantations and owners, 2005-2010

Year Plantation areas (hectares)

 PR PBN PBS Total

2005 2,356,895 529,854 2,567,068 5,453,817
2006 2,549,572 687,428 3,357,914 6,594,914
2007 2,752,172 606,248 3,408,416 6,766,836
2008 2,881,898 602,963 3,878,986 7,363,847
2009 (*) 3,013,973 608,580 3,885,470 7,508,023
2010 (**) 3,314,663 616,575 3,893,385 7,824,623

Sources : Plantation directorate general
Note:

PR: Smallholders' plantations

PBN: Plantations owned by state companies

PBS : Plantations owned by private companies

(*) Provisional

(**) Estimation

Table--2
Total areas of oil palm plantations by regions, 2006--2010
(hectares)

Indonesia /Provinces 2006 2007 2008

Indonesia 6,594,914 6,766,836 7,007,876
Nanggroe Aceh Darussalam 308,560 274,822 274,135
North Sumatra 1,054,695 1,114,871 1,143.906
West Sumatra 315,618 291,734 305,871
Riau 1,547,942 1,620,882 1,623,458
Riau Islands 6,933 6,678 547
Jambi 568,751 448,899 454,771
South Sumatra 630,214 682,730 718,068
Bengkulu 165,221 163,455 161,505
Lampung 157,229 152,409 158,488
Bangka Belitung 133,284 172,227 171,535
West Java 9,831 10,550 11,573
Banten 14,077 14,894 15,046
West Kalimantan 492,112 451,400 476,891
Central Kalimantan 571,874 616,331 709,206
South Kalimantan 243,451 257,862 265,187
East Kalimantan 237,765 339,294 368,504
Central Sulawesi 48,431 52,298 52,169
South Sulawesi 24,490 15,708 16,232
Southeast Sulawesi 2,966 18,912 21,213
Papua 29,736 29,736 25,925
West Papua 31,734 31,144 33,646

Indonesia /Provinces 2009 2010

Indonesia 7,508,023 7,824,623
Nanggroe Aceh Darussalam 292.813 306.085
North Sumatra 1.286.179 1.307.396
West Sumatra 322.844 336.432
Riau 1.734.348 1.815.313
Riau Islands 585 610
Jambi 480.512 500.736
South Sumatra 765.816 798.048
Bengkulu 165.176 172.128
Lampung 169.296 176.422
Bangka Belitung 180.192 187.776
West Java 11.786 12.283
Banten 16.072 16.748
West Kalimantan 510.033 532.034
Central Kalimantan 759.693 791.667
South Kalimantan 283.947 295.898
East Kalimantan 394.312 410.908
Central Sulawesi 55.221 58.063
South Sulawesi 17.144 17.865
Southeast Sulawesi 22.300 23.449
Papua 26.787 27.915
West Papua 35.044 36.847

Sources: Plantation directorate general

Table--3
Large oil palm plantation companies, 2011

Companies Area
 (hectares)

Private plantation companies
PT Astra Agro Lestari Tbk 265,000
PT Asian Agri 160,000
PT SMART Tbk 137,574
PT Bakrie Sumatra Plantation 150,000
PT. Gozco Plantations Tbk 123,894
PT. Sampoerna Agro Tbk 104,480
PT PP Lonsum Tbk 99,386
PT. BW Plantation 93,000
Guthrie Grup 287,390
Wilmar Group 200,000
State plantation companies
PTPN IV 135,198

Sources: ICN processed

Table--4
Indonesia's CPO production, 2007-2011

Year Total Growth
 (tons) (%)

2007 17,664,725 --
2008 18,089,503 2,4
2009 19,440,291 7,5
2010 21,000,000 8,0
2011 (*) 22,000,000 4,8
Average growth 5,7

Note: (*) estimate

Sources: Plantation directorate general

Table--5
CPO production by plantation owners, 2005--2010

Year Production (Tons)

 PR PBN PBS Total

2005 4,500,769 1,449,254 5,911,592 11,861,615
2006 5,783,088 2,313,729 9,254,031 17,350,848
2007 6,358,389 2,117,035 9,189,301 17,664,725
2008 6,923,042 1,938,134 9.238.824 18.100.000
2009 7,247,979 1,961,813 10.230.499 19.440.291
2010 (**) 7,774,036 2,089,908 11.136.056 21.000.000

Sources: Plantation directorate general

Note :

PR: Smallholders

PBN: State companies

PBS: Private companies

(*) Provisional

(**) Estimation

Table--6
CPO production of Indonesia and
Malaysia, 2007-2011

Year Total production
 (million tons)

 Indonesia Malaysia

2007 17.7 15.8
2008 18.1 17.7
2009 19.4 17.8
2010 21.0 17.8
2011 * 22.0 18.5

Sources : ICN processed
Note: * estimate

Table--7
New investments and expansion in palm oil industry, 2010- 2011

Names of Status Locations Production
company capacity

PT. Sampoerna PMDN Kalimantan Oil palm
Agro Tbk plantations--
 10,000
 hectares

PT. BW PMA Kalimantan Oil palm
Plantation Tbk plantations--
 10,000
 hectares

 FFB--30
 tons/hour

PT. Astra Agro PMDN --East --105 tons
Lestari Kalimantan of FFB/hour

 --Central
 Kalimantan

 --South --225 tons
 Kalimantan of FFB/hour

 --30 tons
 of FFB/hour

 --2 units in Each 5 tons
 East of FFB/hour
 Kalimantan

 --1 unit in
 South
 Kalimantan

 --1 unit in
 Central
 Sulawesi

PT. Bio Inti PMA Papua -Oil palm
Agrindo (Daewoo plantations--
International 36,000 hectares
CO)

PT. Permata PMDN Kalimantan CPO--400,000
Hijau Group tons/year
 PKO--150,000
 tons/year

PT. Wilmar PMA Kalimantan CPO--60,000
 tons/year

PT. Jaya Agra PMDN South --Oil palm
Wattie Tbk Kalimantan plantations

 --7,000
 hectares

 --45 tons
 FFB/hour

 --Crumb rubber
 --3 million
 tons/year

PT. Citra PMDN N.a CPO--1 million
Borneo Indah tons/year

PT. Golden Hope PMA South Kalimantan CPO--750,000
Nusantara tons/year

PT. Gozco PMA Kalimantan Oil palm
Plantations Tbk plantations
 --7.550
 hectares

Lestari Pacifik PMA North Bio-ethanol
Bhd and PT Sumatra from palm oil
Inkud Exchange waste--6,5
 million liters
 /year

Names of Investment Start
company up year

PT. Sampoerna Rp500 2011
Agro Tbk billion

PT. BW N.A. 2011
Plantation Tbk
 Rp65 2012
 billion

PT. Astra Agro Rp1.5 2012
Lestari trillion

 US$ 56 2014
 million

PT. Bio Inti Rp53 2012
Agrindo (Daewoo million
International
CO)

PT. Permata Rp2 2012
Hijau Group trillion

PT. Wilmar N.a 2012

PT. Jaya Agra
Wattie Tbk N.a 2012

 Rp125 2013
 billion

PT. Citra Rp300 2013
Borneo Indah billion

PT. Golden Hope Rp936.97 2013
Nusantara billion

PT. Gozco Rp300 2013
Plantations Tbk billion

Lestari Pacifik US$ 350 2015
Bhd and PT million
Inkud Exchange

Sources: ICN processed

Table--8
Reference data for oil palm plantations and palm
oil processing industry

Description Data

Age of plant 20 - 30 years
Starting producing At age of 4 - 6 y
Peak productivity 8 - 18 years
Number of trees per hectare 136 - 160 trees
Productivity in FFB 10 - 30 tons o FFB/hectare
Productivity in CPO 2 - 7 tons of CPO/hectare
Average production in
 Indonesia in 2009 4.11 tons of CPO/hectare

Source: Data Consult

Table--9
Number of CPO factories and production capacity, 2007

Provinces Units Processing CPO
 capacity production
 (tons of capacity
 FFB/hour) CPO

Nanggroe Aceh Darussalam 14 410 599
North Sumatra 87 3.030 3.083
West Sumatra 20 1.080 824
Riau 128 5.645 5.137
Jambi 31 1.503 1.194
South Sumatra 48 2.290 1.809
Bengkulu 12 540 356
Lampung 4 125 384
Bangka Belitung 5 345 397
West Java 1 30 19
Banten 1 60 33
West Kalimantan 20 905 1.005
Central Kalimantan 24 1.290 1.388
South Kalimantan 3 110 337
East Kalimantan 10 510 379
Central Sulawesi 3 90 149
South Sulawesi 1 40 46
West Sulawesi 4 140 393
Papua 3 90 60
West Papua 2 110 74
Indonesia 421 18.343 17.666

Sources: Plantation directorate general, Data Consult, processed

Table--10
Indonesia's CPO and PKO exports and
imports, 2006--2010 Tons
(000'US$)

Year Exports Imports

 CPO PKO CPO PKO

2006 10,471,915 1,274,039 1,645 1,386
 3,522,810 616,476 1,287 1,207
2007 11,875,418 1,335,324 1,067 3,594
 7,868,640 997,807 1,023 6,013
2008 18,141,004 2,493,439 11,721 727
 14,110,228 310,701 13,105 4,153
2009 14,981,467 1,948,430 10,591 534
 7,799,544 115,444 7,005 160
2010 15,650,000 2,529,570 4,000 378
 7,649,965 216,955 7,005 50

Sources: BPS/Plantations directorate general

Table--11
Main CPO export destinations, 2010

Countries of Volume of %
destination exports
 (000 tons)

India 4,507 28.8
The Netherlands 2,880 18.4
China 1,126 7.2
Pakistan 1,033 6.6
Germany 892 5.7
Singapore 829 5.4
Malaysia 780 5.0
Bangladesh 689 4.4
Sri Lanka 329 2.1
USA 141 0.9
Other more than 100 2,444 15.6
countries
Total 15.650 100,0

Sources: BPS

Table--12
Indonesia's consumption of
CPO and PKO, 2007--2010
(Tons)

Year Production Exports Imports Consumption

CPO:

2007 17,664,725 11,875,418 1,067 5,790,374
2008 18,089,503 15,647,565 11,721 2,453,659
2009 19,440,291 14,981,467 10,591 4,469,415
2010 21,000,000 15,650,000 4,000 5,354,000

PKO:

2007 3,532,945 1,335,324 3,594 2,201,215
2008 3,617,901 2,493,439 727 1,125,189
2009 3,888,058 1,948,430 534 1,940,162
2010 4,200,000 2,529,570 378 1,670,808

Sources: BPS/Plantation directorate general

Table--13
Palm oil prices on domestic market.
(Rp/kg)

 CPO/ Palm
Year Belawan Kernel FFB
 (Rp/tons) (Rp/tons) (Rp/tons)

2007 7,361,021 4,416,612 889,77
2008 6,630,000 4,421,000 735,00
2009 8,000,000 5,399,000 1,314,00
2010 10,507,000 7,039,690 1,470,980
2011 * 8,659,000 5,801,530 1,212,260

Sources: ICN processed

Note : * per semester I

Table--14
CPO and PKO prices in the world market
(US$/ton)

Year CPO/Rotterdam PKO/ Rotterdam
 (US$/Tons) (US$/Tons)

2007 777 600
2008 960 768
2009 758 611
2010 1,205 964
2011 * 1,095 876

Sources: ICN process

Note * July

Table-15
HPE for CPO and derivatives, May 2011

Description HPE (US$
 per MT)

Palm fruits and kernel 658
Crude palm Oil (CPO) 1,073
Crude Olein (CRD Olein) 1,148
Refined Bleaches Deodorized Palm Oil (RBD PO) 1,879
Refined Bleached Deodorized
 Kernel Olein (RBD Olein) 1,150
Crude Kernel Olein 1,787
Crude Kernel Stearin 1,787
Refined Bleached Deodorized Palm Kernel Oil 1,833
Refined Bleached Deodorized Palm Oil 1,152
Refined Bleached Deodorized Palm Stearin 1,122
Refined Bleached Deodorized Palm Kernel Stearin 2,141

Sources: Trade ministry

Table--16
Regional regulations (Perda) on palm oil sector

No Issued by Description

SK of Regent District Contribution of
054/2001 administration palm oil
 of Musi companies
 Banyuasin, Rp1000/ FFB
 South Sumatra

Perda No. District Contribution of
56/2002 administration plantations
 of Pelalawan, companies to
 Riau the government
 Rp 1/kg of FFB

Perda No. District Retributions :
15/2002 administration.
 of Indragiri a. forest Rp1/
 Hulu, Riau kg of FFB

 b. Plantations
 Rp1/kg of FFB

 c. CPO Rp 2/kg

 d. PKO Rp 0,5/kg

 e. Oil palm
 seeds Rp 100/
 seed

Perda District Levy Rp15/kg of
 administration FFB from
 of Morowali, nucleus
 Central companies and
 Sulawesi Rp5/kg of FFB
 from plasma
 farms and
 Rp100/kg of CPO

Perda No. District Retributions :
6/2004 administration l plantations
 of Kotawaringin and sales of
 Timur, West seeds:
 Kalimantan
 a. CPO from the
 regency Rp10/kg

 b. CPO from other
 districts Rp5/kg

 c. PKO from the
 regency Rp5/kg

 d. PKO from other
 districts Rp1.5/kg

 e. Retribution: on
 FFB : Rp3/kg

 f. Retribution on
 kernel Rp1/kg

Perda No. District Tax on plantation
7/2000 administration of products state/
 Deli Serdang, North regional and private
 Sumatra companies and
 smallholders

 a. Rubber Rp2/kg

 b. Cacao Rp3/kg

 c. Tobacco Rp2/kg

 d. Palm oil Rp2/kg

 e. Sugarcane
 Rp1,000/ton

Perda District Retribution on use
 administrations of of district road for
 Langkat, and Asahan, FFB transport
 North Sumatra

Sources: Data Consult processed

Table--17
Projection of world's CPO consumption, 2011--2014
(million tons)

Year Consumption

2011 50.8
2012 54.4
2013 57.1
2014 60.0

Sources: ICN, processed

Table--18
Projection of productive oil palm plantations
and CPO production, 2011-2015

Year Productive CPO production
 plantations (million tons)
 (million
 hectares)

2011 8.1 22.0
2012 7.9 21.0
2013 7.7 20.7
2014 8.2 24.6
2015 8.7 30.0

Sources: ICN processed
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Title Annotation:INDUSTRY PROFILE
Publication:Indonesian Commercial Newsletter
Date:Jul 1, 2011
Words:9081
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