TEMPO.CO, Jakarta - Coordinating Minister for Economic Affairs, Airlangga Hartarto, has projected that the price of crude palm oil (CPO) will rise in 2021 and reach about US$668 per metric tonne.

Speaking at the virtual opening of the Indonesian Palm Oil Conference (IPOC) 2020 on Wednesday, the minister explained that the demand for palm oil is expected to recover next year as the economy gradually reopens.

The projected rise in CPO prices, he continued, would also be supported by the continued policy on biodiesel, which has been implemented by the government through the mandatory Biodiesel 30 or B30 program, as well as an increase in demand from major trade partners.

"Considering these factors, the price for crude palm oil is expected to slightly increase in 2021 to US$668 per metric tonne compared to US$650 per metric tonne in 2020," he said.

The Coordinating Minister said that palm oil has contributed significantly to employment, creating jobs for more than 16 million people, and generated an average income of around US$20 billion per year.

"During the pandemic, the palm oil industry continues to contribute to economic activities which are still showing positive developments," he added.

Hartarto further explained that the palm oil industry, which is included in the agricultural sector, has shown greater resilience compared to the industrial sector in facing the COVID-19 pandemic.

To support growth in this sector, the government has issued several policies to help it overcome the downturn, one of which involves support for the palm oil industry. In addition, the government will provide funds for the plantation replanting program that has been launched in North Sumatra, Riau, and South Sumatra by the President.

The program aims to ensure increased productivity, increased income, and sustainable practices by smallholders farmers by improving land legality.

Replanting or rejuvenating palm oil plantations has also been included in one of the strategic programs for national economic recovery. In order to facilitate such efforts, more cooperation between plantations and the government will be explored further, said Minister Airlangga Hartarto.

One of the collaborations that has been established is outlining the rejuvenation process through the formation of a people's business loan, or KUR.

“Currently, we have received a commitment from the bank for their support in fulfilling the replanting target of micro, small, and medium enterprises, which can contribute to Indonesia's economic recovery through the achievement of this accelerated replanting program," Airlangga Hartarto said.

Also Read: CPO Price in Jambi Rises Marginally by Rp64 per Kilogram

ANTARA