Emerging Markets Direct (EMD) released the latest Indonesia Palm Oil Industry Report 2H10. In the report, it says that palm oil is the most important agricultural export crop of Indonesia, with exports increased at 10.7 million tons or 274% over the past decade or roughly 27.4% per annum (1.1 million tons). As of August 2010, exports rose 45% month-on-month to 1.72 million metric tons and expected to rise further approaching the last months of 2010 owing to higher demand driven by year-end festivals.
The report profiles the Palm Oil sector. Ever since 2006, Indonesia has been replacing Malaysia as the largest producer of palm oil. The government stimulated the growth of palm oil industry by introducing some of the core reforms like decentralizing the land-use licensing rights to provincial governments, granting subsidies to smallholders, establishing the pro-rated export tax system for crude palm oil. As the global demand for palm oil grows at 2.2 million tons per year, it is estimated that Indonesia could even satisfy 57% of the annual growth in demand. The high demand even drives crude palm oil prices up to USD750 per ton as of mid-2010.
Our analyst thinks that, Indonesia has the potential to grow into a world biodiesel leader and a model for plantation sustainability, as supported by two of its most valuable assets, namely its oil palm plantations (which is expected to increase to ten million hectares by 2015), and its people. The government encouraged the use of bio-diesel to reduce the use of diesel oil for transportation and industrial use. State oil and gas company, Pertamina started selling bio-diesel mixed with automotive diesel oil in 2006.
What are the problems faced in the industry?
– Difficulty in procuring lands results in the failure of implementing oil palm plantations projects.
– Insufficient supply of high yield seedlings give rise to falsely certified seedlings.
-Processing factories operate without having plantations means a mismatch of capacity.
– Rising environmental concerns trigger anti-palm oil expansion campaigns staged by environmental NGOs.
Rising environmental concerns lead to the withdrawal of major clients like Unilever, Kraft and Nestle. As a result, the palm oil industry supported the proposal of environmental NGOs to declare a moratorium on new licenses for the development of plantation in natural forest and on peat lands, effective from January 2011. How does Indonesia Palm Oil industry strike a balance between environmental concerns and productivity? What are the sustainable measures taken by the industry? What are the prospects and outlook of Palm Oil Industry?
Want to have an overview and competitive analysis of the major industry players?
– PT Astra Agro Lestari TBK
– PT Sinar Mas Agro Resources and Technology TBK
– PT Perusahaan Perkebunan London Sumatra Indonesia TBK
– PT Bakrie Sumatera Plantation TBK.
Check our pages to see more details about our latest Indonesia Palm Oil Industry Report:
Table of Content
1. Industry Profile
1.1 Indonesian Palm Oil
1.2.1 Production of Palm Kernel Oil
1.3 Palm Oil Exports
1.3.1 Crude Palm Oil Shipment
1.5 World Major CPO Producers and Major Oils
1.5.1 Malaysia Palm Oil Industry
1.5.2 Major Oils
1.6 Development in the Palm Oil Industry
1.6.1 Oleochemical Industry
1.6.2 Biodiesel Industry
2. Market Trends and Outlook
2.1 Greenpeace and the Indonesian Pam Oil Industry
2.2 Problem Faced in the Industry
2.2.1 Scarcity of Land
2.2.2 Falsely Certified Seedlings
2.2.3 Issues Over CPO Factories Without Plantation and Plantations without Factory
2.3 Development in the Industry
2.4 Roundtable on Sustainable Palm Oil (RSPO)
3. Leading Players and Comparative Matrix
3.1 Leading Players
3.1.1 PT Astra Agro Lestari TBK (AAL)
3.1.2 PT Sinar Mas Agro Resources and Technology (SMART)
3.1.3 PT Perusahaan Perkebunan London Sumatra Indonesia TBK (LONSUM)
3.1.4 PT Bakrie Sumatera Plantation TBK (UNSP)
3.2 Comparative Matrix
3.3 SWOT Analysis
4. Tables and Charts
Table 1 : Area and Production by Category of Producers 2006 – 2010
Table 2 : Indonesia Crude Palm Oil Exports by Major Destination Countries 2006 – 2010
Table 3 : Shipment Size Distribution
Table 4 : Average Annual Production of Major Oils and Fats 1958 – 2009
Table 5 : Plantation Statistic of AAL 2008- 2009
Table 6 : Palm Oil Planted Area of AAL (as of June 2008)
Table 7 : Operational Highlights of SMART 2005 – 2009
Table 8 : Operational Highlights of LONSUM 2005 – 2009
Table 9 : Operational Highlights of UNSP 2008 and 2009
Table 10 : Financial Highlights of Major Players 2008 and 2009
Chart 1 : Indonesia Regional Palm Oil Production
Chart 2 : Indonesia and Malaysia Palm Oil Production 1996 – 2008
Chart 3 : Historical Palm Oil Area & Production 1985 – 2009
Chart 4 : Indonesia Annual Palm Area Growth
Chart 5 : Indonesia Palm Area Growth by Location
Chart 6 : Production of Crude Palm Oil by Country in 2008
Chart 7 : World Production of Palm Kernel Oil 2005-2010
Chart 8 : Indonesia Palm Oil Exports 2001-Jun 2010
Chart 9 : Indonesian Crude Palm Oil Export by Port 2006-2010
Chart 10 : Shipment Size per Month 2010
Chart 11 : Export Price and Volume of Indonesian CPO Jan 2006-April 2010
Chart 12 : Palm Oil Production in Malaysia and Indonesia 2004-2009
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