Seeking Oil Palm Strains in Angola

oil palm seeds
Indonesia and Malaysia will send a joint exploratory mission to Angola next year to identify more productive strains of oil palm, the fruits of which are used to make crude palm oil, or CPO, a senior Agriculture Ministry official said.

Achmad Mangga Barani, the ministry's director general of plantations, said the visit was scheduled for April next year. He said that Angolan oil-palm varieties required less water than many of the ones grown in Southeast Asia.

A team from the ministry traveled to Cameroon on a similar mission from March to May, and returned with samples of 103 oil-palm varieties, which are now being stored in Sijunjung, West Sumatra Province. While Indonesia may be the world’s top producer of oil-palm seeds, the country's seed producers are still unable to meet domestic demand.

Total local demand is forecast to reach 239.92 million seeds this year, while it is expected that local producers will only be able to produce 174.65 million, representing a 27 percent shortfall. As a result, Indonesia is forced to augment its stocks by importing between two and three million seeds annually from countries such as Thailand, Malaysia, Papua New Guinea and Costa Rica.
Oil-palm plantations cover 7.6 million hectares in Indonesia while the government plans to add 389,000 hectares next year, and a further 338,000 hectares in 2010.

Indonesia and Malaysia, the world’s two biggest palm-oil producers, together account for 85 percent of the world's supply. In 2007 alone, Indonesia produced 16.9 million tons of palm oil, with exports from January to November of that year worth $8.49 billion.

Indonesia expects to ship 13 million tons of palm oil this year. However, with both declining CPO prices and a drop in demand amid the global financial crisis, Indonesia will have to fight hard to maintain its exports.

Many of the countries hit hardest by the crisis are also key importers of Indonesian CPO, including the United States and Europe. Following the decrease in overseas demand in the wake of the financial crisis, the government eliminated its CPO export duty on Nov. 1 to stimulate exports. Previously, the tax was set at 7.5 percent.

Indonesia and Malaysia are hoping to increase prices by reducing supply internationally. One proposal that has been raised is the felling of some oil palms to counteract expectations of falling global demand for the commodity.

Under the plan, Malaysia would slash 200,000 hectares of palm trees, while Indonesia would clear 50,000 hectares. Crude palm oil is the country’s most valuable export commodity.


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