Plantations & Agriculture
From The Report: Indonesia 2012
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Long a major exporter of raw natural resources, including agricultural products, Indonesia is looking to maintain its strengths in this sector while expanding downstream industries to fuel domestic industry. The country imports over 20m tonnes of food annually, but major investment plans are designed to mitigate the need for imports by boosting domestic output. Indonesia’s strengths are manifested in its palm oil sector, which was forecast to produce 23.5m tonnes for 2011, a world-leading total. One controversy arose in 2011 when the export tax on refined palm oil was decreased to nearly half that of CPO, which should boost downstream processing but may eat into upstream profits.

This section features an interview with Franky Widjaja, Vice-Chairman for Agribusiness, Food and Livestock, Indonesian Chamber of Commerce and Industry (KADIN).

Articles from this Chapter

Overview

Preparing for the harvest: The government is creating growth zones and enhancing regulations
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Following the well-established path towards rapid economic development, Indonesia has long relied on selling its vast reserves of natural resources. At the same time, more markets have been eager to snap up raw materials such as crude palm oil (CPO), cocoa, rubber and other products to fuel their manufacturing. This trajectory has shown signs of altering in 2011 as the government has become more proactive in terms of expanding downstream industry, particularly through revising export tariffs…

Analysis

The day’s catch: Aiming to become the world’s largest fisheries producer
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As an archipelago consisting of around17,500 islands and with a coastline of some 81,000 km, Indonesia is uniquely endowed in its access to aquatic natural resources. The Indonesian fisheries industry produced a total of 10.85m tonnes in 2010, up from 9.82m tonnes in 2009 according to data from the Ministry of Marine Affairs and Fisheries (MMAF). This translated into export revenues of $2.66bn, up 8.05% over the $2.46bn recorded in 2009. The MMAF set a 2011 fisheries production target of 12.26m…

Interview

Franky Widjaja, Vice-Chairman for Agribusiness, Food and Livestock, Indonesian Chamber of Commerce and Industry (KADIN): Interview
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Interview:Franky Widjaja How will new export duties on crude palm oil (CPO) and its derivative products affect the industry? FRANKY WIDJAJA: The new export duty is not necessarily a major change or something completely new. I view it as more of a fine-tuning of existing policy. The original idea of the export duty was to alleviate pressure on inflation so that essential commodities like rice, sugar, flour and cooking oil do not experience a significant increase in price as these products…

Analysis

The sweet spot: Sector players are looking to capitalise on expected production boosts
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Adverse weather has hit the world’s third largest cocoa producer hard the past two years, first with La Niña bringing copious amounts of rain followed by a dry spell from May to August 2011 and a prolonged infestation of damaging cascular-streak dieback disease. These extremes have put the brakes on production and exports, which had been bullish for the past decade. “Economic fundamentals are strong, but there will be difficulties,” Arshad Chaudhry, president director of Nestlé, told…