The Prospects of Palm Oil as the Substitute For Crude Oil (Biofuel) in Indonesia

Demand for palm oil is increasing at the beginning of May, due to crude oil prices rising have reached its record at $ 114.83 a barrel on May 02, 2011.
If crude oil prices were high then in addition to corn, palm oil can be used as the abundant source of "biofuels" or fuel from crops. So that, the palm oil price will increase steadily.
Palm oil as a substitute for crude oil is the most efficient oil produced in the world, which only takes 0.26 hectares of land to produce one ton of oil, while soybean, sunflower and rapeseed requires 2.22, 2.00, and 1.52 hectares, respectively, for producing the same.
Besides humans nowadays want to be healthy, so they want to reduce the animal fat consumption, , palm oil is used as an alternative cooking oil, because in addition to vegetable oils, its levels of trans fat are also low.

Palm oil prices in Malaysia Market, seen rising, from the July 9, 2010 the price is only MYR 2.237, then it is constantly increasing and new record had experienced its highest price at MYR 3.766 on January 7, 2011, and MYR 3.710 on Feb. 11. It had dropped to its lowest price on March 25 2011 at MYR 3.150, and on May 2 was reached MYR 3.3293 and is predicted to rise when almost all commodities price especially crude oil price increases.
Seeing the growing need of palm oil as the substitute as crude oil, the demand from India, China and the EU will more increase.
Indonesian palm oil production, according to the Head of Marketing and Promotions Gapki (Indonesian Palm Oil Association), Susanto in a press conference at the Gapki Office, Sudirman Park, Jakarta, said that on January 27, 2011, will increase 1.5 million tons or 22.5 million tons in 2011, compared to 2010 (20 , 8 million tons).
This calculation is based on prediction of the additional production from fields planted area of 400 thousand ha in 2007, which is now entering a period of crop. With estimates of productivity 2.5 ton / ha / year, then the land can produce 1 million tons of CPO. In addition, there is still land planted in 2005 and 2006.
From the total Indonesian production of palm oil by 22.5 million tons, according to Susanto, domestic CPO consumption as much as 5.5 million tonnes while the remaining of 17 million tonnes is planned for export.
According to the survey of Indonesia's palm oil production reported by the USDA (United Stated Department of Agricultural) until the end of 2010 estimates as follows: Indonesia 23,600 metric tons and Malaysia 18,000 metric tons.
Gapki (Indonesian Palm Oil Association) based on data from January to December 2010, the volume of Indonesian CPO exports edged up by 127,498 tons or be 15,656,349 tons, compared to the previous year which amounted to 15,528,851 tons. According to Executive Director Gapki, Fadhil Hasan, national CPO export growth driven by increases in the purchase of three major customers: India, China and the EU.
In 2010, the number of CPO and its derivative products export to India as much as 5,793,077 tons of which increase from the 2009 amounted to 5,630,199 tons. Meanwhile, EU countries increase the amount of the purchase of CPO and its derivative products from Indonesia amounted to 3,728,677 tons.
Furthermore, China imported CPO and its derivatives from Indonesia amounted to 2,410,337 tons. Then, Bangladesh buy CPO and its derived products to from Indonesia amounted to 629,529 tons. USA buy CPO and its derived products to from Indonesia amounted to 172,167 tons. Then, Pakistan imported 87,379 tons of CPO. There is also, exports of Indonesian palm oil and derived products to the rest of other countries amounted to 2,889,182 tons.
Fadhil Hasan said the Indonesia national CPO export volume is still dominated by crude palm oil rather than derivative products. From the total exports of 15.6 million tons was still dominated by exports of crude palm oil (CPO), which reached 8,779,940 tons and the remaining derivative products amounted to 6,876,405 tons.
Peasant production in Indonesia increased to meet the global demand driven by demand for biofuels, so that the Indonesian government want to make Indonesia as the largest palm oil producer.
Meanwhile, to meet domestic and overseas need for biodiesel then there are some large factories biodiesel refinery, such as PT. Asianagro (biodiesel refinery), PT. Bakrie Group (biodiesel plants and new plantation), Surya Dumai Group (biodiesel refineries) and global companies such as Cargill (sometimes operate through CTP Holdings of Singapore, to build new refineries and factories in Malaysia and Indonesia, expanding the company's Rotterdam refinery to handle palm oil, plantation acquisition in Sumatra, Kalimantan, Indonesia and Papua New Guinea Peninsula) and Robert Kuok Wilmar International Limited (the plantations and 25 refineries throughout Indonesia, to supply raw materials for a new biodiesel refinery in Singapore, Riau, Indonesia, and Rotterdam).
The development of oil palm plantations, is a contradiction because the dilemma of forest destruction that became the source of water and green earth (humus) so bad for global warming, and resulting in the occurrence of forest fires. The owners of palm plantation should be able to find a solution so that it remains able to develop their palm plantation. It's not an easy task, but they must to do that.

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