Indonesian Palm Oil Association raises concerns with B50 programme amid stagnant production

Implementing the B50 programme had the potential to reduce palm oil exports by up to 6M tonnes, which would lead to a slowdown in the drive to increase production, GAPKI Chairman Eddy Martono said during a press conference on 30 October in Jakarta, Indonesia.

Exports are an important way for the palm oil industry to raise funds through export levies, which are collected by the oil palm plantation fund management board (BPDPKS) and are used as the main source of funding for important programmes, including replanting programmes of smallholders’ palm plantations, according to GAPKI.

“The government can no longer delay the acceleration of [the] replanting programme because palm oil production has been continually declining. This year alone until August (2024), production of CPO [crude palm oil] dropped by 4.86% to 36.27M tonnes compared to last year,” Martono said.

“In the meantime, domestic consumption has been continually rising, reaching 15.57M tonnes until August 2024, or an increase of 1.94% from last year.”

With current levels of production, Martono said a decrease in palm oil exports would affect B50 implementation, which was heavily dependent on funding via export levies.

In an earlier announcement, Agriculture Minister Andi Amran Sulaiman said that he hoped the B50 programme could be started in 2026.

Sulaiman said he was confident domestic CPO production, which totalled 46M tonnes at the time of the report, would be sufficient to supply the 5.3M tonnes of feedstock needed for B50 production.

Remaining palm oil output would be used to meet domestic need and exports, he added.

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Tags: GAPKI, biodiesel, palm oil, Indonesian Palm Oil Association, consumption, B50, exports, Indonesia, Crude palm oil, Production