Advertise
Severe drought linked to the El Niño phenomenon in Indonesia's West Kalimantan province has severely complicated the transport of palm oil along the Kapuas River. As water levels continue to drop, barges and tugboats are increasingly running aground, creating a logistical bottleneck that has forced processing facilities to slash their purchases of fresh fruit bunches because they cannot evacuate existing crude palm oil stocks from storage.
Reporting from The Japan Times indicates that these transport disruptions have impacted 13 of the region's 50 palm oil mills, representing approximately half of the province's total processing capacity. West Kalimantan is a critical production hub, accounting for roughly 11% of the total output from Indonesia, the world's leading palm oil producer.
Data from the Indonesian Palm Oil Association, GAPKI, highlights the severity of the reliance on waterways: 40% of West Kalimantan's palm oil is traditionally moved via the Kapuas River, which spans 1,143 kilometers. Transitioning to road transport is proving difficult as trucks offer significantly lower capacity, remain in short supply, and command costs three times higher than river shipping.
Dian Kurniawan, manager of the Multi Prima Entakai mill, noted that his facility's intake dropped to 10,000 tonnes of fruit in September, a sharp decline from the 30,000 tonnes processed in July. By October 1, the mill held 8,200 tonnes of crude palm oil, leaving minimal room in its 8,500-tonne capacity tanks. He emphasized the scale of the crisis by noting that while the facility could previously move 2,000 tonnes of product in four days via water, trucks can sometimes manage only 100 tonnes per day.
The logistical gridlock is hitting smallholders hardest, with fruit often spoiling before it can be processed. One farmer, Supendi, reported waiting four days in early October to unload seven tonnes of fruit at a mill in Sanggau, only to be turned away because storage facilities were at maximum capacity.
Indra Rustandi, head of the local branch of the APKASINDO farmers' group, stated that the resulting loss of income has forced some producers to slash fertilizer application by up to 70%. Consequently, GAPKI has lowered its 2026 production forecast for Indonesia by 2.9%, citing the impact of dry weather on fruit ripening rates.
Source: The Japan Times - UA.NEWS