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The Indonesian Palm Oil Entrepreneurs Association (Gapki) has warned that the palm oil industry can no longer rely on horizontal land expansion to satisfy domestic and export requirements. According to the association, future growth must instead be driven by strengthened productivity, enhanced human resource quality, advanced technology, and robust policy integration from upstream to downstream sectors.
Sahari, the Communication Head of Gapki Bandung, stated that while Indonesia maintains a dominant position in the global supply chain, the limitations on land expansion make increasing yields per hectare a critical necessity. 'The palm oil plantation industry holds a strategic position to encourage sustainable economic transformation in the country,' Sahari noted in a statement issued in Jakarta, aligning the sector's goals with the government's 'Indonesia Gold 2045' vision.
Data from Gapki reveals that global palm oil supply stands at approximately 85 million metric tons, with Indonesia contributing roughly 49 million metric tons, or 58 percent of the total. Sahari highlighted that Indonesia accounts for 22 percent of the world's entire vegetable oil supply, meaning the sustainability of national production is a primary factor in maintaining the global supply-demand balance.
Gapki estimates that if palm oil production fails to grow significantly while demand continues its upward trajectory, Indonesia could face a massive supply shortage of around 27 million metric tons. Since the implementation of a moratorium on private plantation expansion, land area growth has slowed considerably. Gapki assesses that to bridge the looming gap without increasing planted areas, crude palm oil productivity must reach a target of approximately 5 metric tons per hectare per year.
Furthermore, Sahari emphasized that productivity gains must be coupled with strict land-use controls and the application of sustainability principles. He pointed to the vital roles of agricultural technology, educational centers, investment, and infrastructure in elevating the capabilities of farmers and laborers. The integration of policies across the agricultural, industrial, and service sectors is also essential to maximize value for the national economy. Gapki concluded by reminding stakeholders that significant downstream investments still depend heavily on the certainty of raw material supply from the upstream sector.
Source: VOI.ID