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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

08/08/2003

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

Antara

CATEGORY

HEADLINE

Indonesian ministry to stop approvals for oil palm
Jakarta, July 31 (ANTARA) - The Agriculture Ministry is planning totemporarily stop issuing approvals for investment in oil-palm planting asthere are already too many investors in the sector, a senior ministryofficial said.

"At least 69 investors have proposed to develop oil-palm plantations andwe want to curb it (investment in oil-palm plantations) because we alreadyhave a lot," said Subagyono, director general for plantation production,here Thursday.

There was high investors' interest in oil-palm planting following a risingtrend in the market price of crude palm oil (CPO) and the sector's brightprospects.

Currently, oil-palm plantations in Indonesia cover a total area of fourmillion hectares with CPO production at nine million tons annually.

Some 60 percent of national CPO production is exported and 40 percentmarketed at home.

"With such a huge area and production level, there is enough CPO to meetlocal as well as export demand," Subagyono said.

The high production of palm oil would help the government to avoid theproblem of edible oil scarcity and price fluctuations, especially towardIdul Fitri and Christmas.

Subagyono said investors in oil-palm plantations should focus theirattention on replanting because the existing oil-palm trees were alreadyaged between 30 and 40 years.

"I hope that farmers will be able to obtain the funds for replanting if wedon't want to have problem in the future," he continued.

Subagyono added he had offered businessmen to invest in sugar caneplantations because currently there are 268,000 hectares of land for sugarcane planting.

"I have offered investors to switch to sugar cane sector but none of themis interested. In fact, Indonesia needs more sugar cane plantations,"Subagyono said.

The agriculture ministry had been cooperating with farmers, investors andlocal administrations to increase oil-palm plantations' productivity, hesaid.

"This was done in Nanggroe Aceh Darussalam with 2,000 hectares ofplantations," he added.

The authority would also provide superior seeds, improve farmers' abilityand farming techniques as well.

Some Malaysian investors were also keen to invest in the oil-palm sectorin Indonesia due to lack of plantation area in the neighboring country.

Indonesia is the world's second largest palm oil producer after Malaysia.