TEMPO.CO, Jakarta -The national crude palm oil (CPO) industry would face difficult challenge related to prices this year, Indonesian Palm Oil Council (DMSI) chairman Derom Bangun said on Sunday, January 3, 2016.
Derom predicted that CPO prices would not exceed US$650 per metric ton as the international oil prices continued to decline.
“The oil price is currently below US$35 per barrel. Other fuel prices will also decline,” he said.
Derom explained that the declining oil prices had caused developed countries to reduce biofuel consumption, resulting in decreasing vegetable oil absorption.
However, Derom expressed optimism that the national CPO industry would survive if the government program to implement 20 percent of bio-content in the biodiesel (B20) mix was to be realized next year.
Another challenge to be faced by the Indonesian CPO industry is a long dry season caused by last year’s el-nino. Derom said that the extreme climate would cause palm fruit to shrink during the harvest season.
“The CPO productivity could drop by 500,000 tons,” Joko Supriyono, chairman of the Indonesian Palm Oil Produces Association, said.
PINGIT ARIA