Table of Contents
Indonesia: Palm Oil covers the sector overview, plantation, production, consumption, exports, stocks, prices and world oils and fats. It also covers the market trends in terms of the oleochemical and biodiesel industry developments, industry challenges, policy and taxation, government incentives, sustainable palm oil and market outlook, plus the comparative matrix and SWOT analysis of the industry leading players: PT Astra Agro Lestari Tbk (AALI), PT Sinar Mas Agro Resources & Technology (SMART), PT London Sumatra Indonesia Tbk (LONSUM), PT Sampoerna Agro Tbk (SGRO), and PT BW Plantation Tbk (BWPT).
Indonesia is the world’s largest producer of palm oil and the industry has been the economy’s most valuable agricultural export sector for the last decade. The attractive returns and strong demand have encouraged investment in the Indonesian palm oil industry, resulting in significant rural economic development and poverty alleviation.
The Indonesian palm oil industry saw significant growth in recent years, thanks to increasing matured palm areas as well as improvements to the operational productivity of plantation and CPO processing. Indonesia’s CPO production reached 25.6mn tonnes in 2012, representing half of the world total. Forecasters expect the country’s production to increase to 28mn tonnes in 2013 and 40mn tonnes by 2020. Demand growth remains solid in Indonesia with palm oil consumption of 6.9mn tonnes in 2012, up 9.2% y/y.
The country should be cautious, however. Despite the expected increase in future demand, restrictions on the conversion of forests to oil palm plantations in Indonesia would reduce the availability of fertile land and impede expansion of the industry. Government policies should aim to improve productivity, particularly among smallholders, and implement pro-industry growth policies.
Current leading players in the market include Astra Agro Lestari, Sinar Mas Agro Resources & Technology, London Sumatra Indonesia, Sampoerna Agro and BW Plantation. The industry players posted mixed results in FY/2012 due to lower average selling price and volume of palm products.
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