WHAT IS PALM?

Palm oil is an industrial/ plantation plant used for cooking oil, industrial oil, and fuel. Palm oil became popular after the industrial revolution in the late 19th century which led to an increase in the demand of vegetable oil for food and soap industry. The palm oil trees planted in Indonesia originated from the Continent of African and were brought by the Dutch to be planted at the Bogor Botanical Gardens in 1848. Palm oil was only grown commercially in a plantation at North Sumatra in 1911.

               Indonesia has become one of the largest palm oil producing countries in the world. The amount of palm oil production is 43 million metric tons in 2019, with the growth rate increasing from each year as 3.61%. Meanwhile, the area of ​​palm oil plantations in Indonesia is the largest in the world with an area of ​​16.381 million hectares (Decree of the Minister of Agriculture No 833 / KPTS / SR.020 / M / 12/2019). Indonesia also exports 75% of its palm oil production and it become the major commodity. China (8,136.70 million tonnes), the European Union (5,743.60 million tonnes) and India (5,164.08 million tonnes) are the top three export-destination countries.

The results of palm oil processing are crude palm oil (CPO), known as yellow vegetable oil and colorless (clear) palm kernel oil (PKO). Palm oil has various benefits which are often used as a raw material for industry, both in the food and non-food industries. Even though Indonesia was hit by the Covid-19 pandemic, the export value of palm oil products still showed a positive figure of USD 22.7 billion or grew by 13.5 percent from 2019. Reference prices for crude palm oil or Crude Palm Oil (CPO) in the April 2021 period reached a high figure of USD 1,093.83 per ton.