TEMPO.CO, Jakarta - The price of crude palm oil (CPO) is predicted to continue to soar in line with the increase in global demand. In 2021, the benchmark price of CPO has crossed Rp 1,250 per metric ton and is projected to be higher in 2022.
“The price of palm oil is more than US$ 1,250. This will increase by more than US$ 1,500 next year because the soybean harvest around the world will not be too good,” said Minister of Trade Muhammad Lutfi at the Digital Technopreneur Fest and Technopreneur Campus FORBIS 2021 event which was broadcast via the Ministry of Investment's YouTube, Friday, November 19, 2021.
The soaring price of basic commodities is a consequence because in determining the previous highest retail price (HET), the government used a benchmark price of 500-600 CPO per metric ton. “Once the price (CPO) doubled, the price of cooking oil was more than Rp. 16 thousand. This is a consequence of the international market," said Lutfi.
However, Indonesia is predicted to be able to take advantage of the momentum of rising CPO prices to boost exports. So far, CPO products have been recorded as the largest contributor to commodity exports from Indonesia, whose value reached US$ 27 billion in 2020. Meanwhile, in October 2021, Indonesia managed to sell US$ 3.36 billion of CPO abroad.
Coordinating Minister for Economic Affairs Airlangga Hartarto previously said that Indonesia could be a price maker or price center for global CPO. The government has now prepared a roadmap for the downstreaming of palm oil products.
The roadmap includes increasing productivity, supporting downstream activities such as oleofood, oleochemicals and biofuels, creating ecosystems, governance, capacity building and technology development for oil palm business development. With a land area of 10 percent of the total global land bank for vegetable oil, Airlangga said Indonesia was able to become the largest palm oil producing country and control 55 percent of the world's palm oil or vegetable oil market share.
In addition, Indonesia is able to produce 40 percent of the world's total vegetable oil, which plays an important role in the context of world food security. "The palm oil industry contributes to national exports by 15.6 percent of total exports in 2020. This value is certainly one of the foreign exchange contributors that consistently continues to increase even during the pandemic," said Airlangga.