Indonesian palm oil investment over $2.5 billion, but is demand cooling?

September 11, 2014 |

In Indonesia, palm oil investment over the last three years has totaled more than $2.7 billion, demonstrating the potent effect of the progressive export tax and tax breaks introduced in 2011 to spur growth in the industry that processes palm oil into various derivatives.

70% of the country’s total overseas shipments are now palm oil derivatives. Trade Minister Muhammad Lutfi asserted that the government would continue to maintain its primary destinations, such as the European Union, as well as reach out to new prospective markets.

The article stayed silent on the impacts of changing demand from Europe resulting from concerns regarding the sustainability of Indondesia’s palm oil operations. The Digest reported earlier this year that Indonesia’s palm oil producers association GAPKI says it expects exports to fall by up to 9.5% to between 19 million and 20 million metric tons.  Last year, exports reached 21 million tons. Exports through June this year reached 9.75 million tons compared to 11 million tons during the same period in 2013.

 

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Category: Fuels

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