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The rejection of the European Union is a challenge for the Indonesian palm oil industry. Photo/YorriFarli/SINDOnews
Also read: Rows of the richest palm oil conglomerates in Indonesia, take a peek at the list
Last year, Indonesia’s CPO exports reached USD 35 billion or more than IDR 500 trillion (exchange rate of IDR 14,300). That number increased by 55.8% compared to 2020 which amounted to USD22.9 billion.
CPO exports have indeed been the mainstay of this Palm Oil Country to gain foreign exchange since more than two decades. In 2000 Indonesia’s CPO exports were 4.1 million tons worth USD1.1 billion dollars.
Slowly but surely, Indonesia’s CPO exports have been increasing since then. In 2010, Indonesia’s CPO exports reached 16.3 million tons worth USD13.5 billion.
CPO is the prima donna of Indonesian exports. Hundreds of billions of dollars have been consumed by the palm oil industry from exports.
The only commodity that can outperform CPO exports is coal. However, since 2015, the value of CPO exports has straddled coal and has become the largest contributor to the division for Indonesia. That year, coal exports amounted to USD 14.7 billion, while CPO exports reached USD 15.4 billion.
The tourism sector can actually serve the achievement of foreign exchange for CPO exports. In 2018 the tourism sector’s foreign exchange reached USD 19.29 billion. At that time, tourism was predicted to be the number one foreign exchange-generating engine in Indonesia.
Well, in 2020 until now the Covid-19 pandemic has hit. The tourism sector collapsed. Looking at the 2021 data, CPO has increasingly established itself as a numero uno foreign exchange earner.
Apart from being the largest foreign exchange earner, the palm oil industry is also hailed as one of the largest sectors that absorb labor in Indonesia. The Palm Oil Plantation Fund Management Agency (BPDPKS) revealed that labor absorption in the palm oil industry sector reached 16.2 million workers, consisting of 4.2 direct workers and 12 million indirect workers.
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