Palm oil downstream industry development

Agriculture expert from Bogor Agricultural University (IPB), Prof Erliza Hambali told through the development of the palm oil downstream industry, it could be one of Indonesia's biggest foreign exchange producer. According to Prof. Erliza Hambali, the industry can be relied upon as a driver of national economy and are able to produce large amounts of foreign exchange. Referring to the data issued by the chamber, protection of national income in 2010 of crude palm oil (CPO) reached U.S. $ 14 billion.
Prof. Erliza argues, the income from CPO at U.S. $ 14 billion can be increased through the development of palm oil downstream industry (IHKS). With such development, value-added product in Indonesia can be utilized as much as possible both to improve people's welfare state and foreign exchange.
He said that, until now Indonesia is the country's largest CPO producer in the world. This reputation has been borne by Indonesia since 2006. According to him, the advantages of Indonesia at the sub-sector needs to be kept on hold and was developed to improve the welfare of the community.
He believed the development of the palm oil downstream industry may be the important key in the national economy forward, foreign exchange, job creation, increase added value for CPO and improve national food security and energy.

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World's palm oil producers

Indonesia is now the world's largest palm oil producer beat Malaysia, Bangkok, Thailand, and several other agricultural countries. In the last 5 years, the development of palm plantations in that country reached 5 million hectares of the reserve potential of 19.7 million hectares, or much broader than with Malaysia remaining 4.6 million hectares. Previously, Malaysia known as the largest producer but now their land had limited and was replaced by Indonesia. A rapid development of palm oil industries in this country,is supported by land and climatic conditions which is suitable for plant growth.
Meanwhile, the development of downstream businesses is continued to be developed. CPO is generally processed into refined oil, in the form of cooking oil (olein) and other products such as cocoa butter substitute (CBS), industrial margarine, and so on. The development of its chemical industry is also very heavily developed. The oleochemical industry today has been developed by some of the world's palm oil producer. In fact, in addition to an existed plant in Tanjung Morawa, today, one of the companies has nearly completed the world's largest oleochemical industry, which is located in Kuala Tanjung, North Sumatra. Construction of the plant has attracted one of the largest consumer goods manufacturers in the world, to order their products over the next 15 years.
Indonesian Palm Oil Association (Gapki) said Indonesia's CPO production in 2005 reached 15.2 million tons. From that volume, $ 4 million tons is consumed for domestic purposes and the remainder, 11.2 million tons, for export. This quantity can be compared with the export data from the Indonesia Bank data that said during 2005, it reached U.S. $ 4,707 million. If the price per tonne of CPO reached U.S. $ 400, then the number is very similar to the export volume issued by Gapki, which is about 11.2 million tons.
Then by the production volume of 15.2 million tons, whether this country has become the biggest producer or not? For that purpose, you may look for the production data from Bank Negara Malaysia, or the Malaysian Central Bank, which is seen producing highly reliable data. The result is the production from Malaysia in 2005 only 14 million tons. This means that Indonesia was already the world's largest palm oil producer. These facts speak for themselves eventually.

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Tax change effect on palm oil business

Indonesia change its policy of export tax provision of palm oil derived products obtain business reaction from buyer country such as India. The Hindustan country is planning to raise import tariffs of those commodities that will go into their country.
Anticipating the release of the policy, the traders in the country of Hindustan is buying more palm oil derivative products such as RBD olein from Indonesia. A total of 50,000 tons of that olein has been bought by the importer from India. The sources from Indonesia traders and India said the purchase was also a part to anticipate the demand for festivals or holidays in India. The edible oil processing industry in India is driving the government to raise import tariffs of those commodities from 7.7% to 16.5%. This is to protect the their industry interests which is now experiencing idle.
Secretary General of Indonesian Palm Oil Association (Gapki) Joko Supriyono said not know about that action from India. But clearly the current government of India will raise the its import tariff. He explained the presence of Minister of Finance Regulation No. 128/PMK.011/2011 on Regulation Amendment of the Minister of Finance Number 67/PMK.011/2010, it change the set of export tax on palm oil business is more expensive 0.5% to 4.5% from the previous.
"With India raise Indonesia CPO import tariffs became increasingly uncompetitive as it is subjected to the tax both in the producer country and also the destination country," he said.
Joko said India and Indonesia have the same interest-related to the CPO trade between the two countries. But with the government policy to change the rules so Indonesia palm oil products is more uncompetitive.
"Yes, it is strange (situation), if the state imposed a policy of import tariffs, then it is normal, but Indonesia also imposed a policy of export tariff," he said.
In addition to the change in export tax in accordance with the Minister of Finance Regulation No. PMK 128/PMK.011/2011, the Indonesia government has also added a total of 14 palm oil derived commodities(downstream products) are subject to tax exports. Previously those items, include crude palm oil (CPO), which is subjected to exports tax only amounted to 15. Thus there are 29 oil derivative products are subject to tax exports.
It is set in the Minister of Trade Regulation (Permendag) No. 26/M-DAG/PER/9/2011 which is officially assigned at September 14th 2011. HPE as many as 14 palm oil derivative products are subjected to export tax that starting from September 14th 2011 until September 30th , 2011.

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World palm oil production

World palm oil production during the last two decades has increased about 7.3% per year. This situation is highly influenced by Malaysia and Indonesia which contributed 80% of the global market.
In the next five years, crude palm oil or CPO production is expected will increase but smaller than the world consumption. Malaysia still dominated about 50% of the world market, while Indonesia is at the second level with 30%. Currently, those countries are the leading CPO producers with controls more than 80% market share.
World palm oil production is also contributed by other countries such as Nigeria, Colombia, Thailand, Papua New Guinea, and even the Ivory Coast, which are arguably only the complements. Malaysia ranked top with the volume in 2003 reached 13.35 million tons, while Indonesia is still 9.75 million tons. In 2004, Indonesia CPO reached 11.5 million tons. That's why a lot of optimism among analysts said that they would soon beat Malaysia, especially if you see the land area in Malaysia is more limited, while in Indonesia is still so widespread.
Palm oil (PO) in Indonesia is mostly absorbed by the food industry, especially cooking oil (CoO) and non-food industry such as cosmetics and pharmaceutical industry. However, the greatest market potential is the frying oil. That potential is evident from the increase of population has implications for the increasing of food needs. Until 1997, their cooking oil production just reached 3.1 million tons of with PO contribution of 2.3 million tonnes of CoO (74%) which require 3.3 million tonnes of PO.
World palm oil production will continue to increase in the future, considering that it has the highest oil productivity per hectare plantation, even when compared with corn, canola, or soybean oil.

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Palm oil products

Palm oil products are growing significantly, both in terms of needs and types. In connection with the increasing needs of domestic consumption Indonesia, the Indonesian government has tried to increase its production through the development programs of the private and the public, in addition to continue to promote the growth of downstream industries.
There are some cooking oil feedstock produced in Indonesia, among others, derived from coconut oil (CO), crude palm oil (CPO) and from Palm Kernel Oil (PKO)
CPO is obtained from its fruit fibers which is processed until soft and then squeezed. The results of this extraction can be used as base material for frying oil, margarine, etc.
In that processing, palm nuts are not broken and will be processed further to produce PKO. Because the oil produced from the kernel is very little compared to the CPO, the nuts are directly exported without further processing stages.
The oil can be traded in different forms, depending on the stage of its processing technology. Related to the edible oil industry, there are six types of its products are traded, namely palm oil (PO), pre-treated PO (PTPO), refine bleach & deodorize PO (RBDPO), refine bleach deodorize palm kernel oil (RBDPKO), pre-treated olein (PTO) or known as olein and refined crude olein.
CPO is the raw material for fatty acid, refine stearine (RS), and refine olein. The main market of refine stearine and fatty acid is the soap factory, margarine manufacturing, and chemical industry. RO can be mixed along with certain additives to obtained margarine, shortening, and bar soap.
Palm oil products in downstream level include intermediate products. They are the oleofood such as frying oil, margarine, and shortening. Cooking oil production increased 13-20% per year during 1991 to 1995 to reach 1,502,027 tons in the last year.
Increased CPO-based frying oil production beat down the Crude Coconut Oil / CCO and copra as a cooking oil raw material. PO productivity per hectare of plantation area is generally higher than coconut oil production.
Development of frying oil in Indonesia is shown by the increased demand for CPO. Every year it tends to increase with increasing downstream industries, such as frying oil and oleochemicals. Indonesia's domestic CPO consumption needs in 1995 about 3.3 million tonnes.
Currently, PO is the most dominant alternative copra substitution compared with maize and beans. This is because cooking oil price from PO is cheaper than from copra or CO.
In Indonesia, consumed cooking oil is divided into groups as follows: 1) CO from middle or small-scale industrial, 2) refine coconut oil, this type is obtained by refining the fist type mentioned before. 3) klentik oil (javanese name), this type is made by small entrepreneurs with fresh coconut as raw materials, and has good smell but is not durable. 4) others such as corn, peanut oil, and so on. 5) from PO. 5) margarine from vegetable oils.
Palm oil products can be expanded in future to produce a commodity in the new field, including health and energy, such as health supplement rich with vitamins A and biofuels.

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Unsaturated fatty acid

Unsaturated fatty acid (UFA), such as monounsaturated fatty acid (MUFA) and polyunsaturated fatty acid (PUFA), can have positive health benefits when consumed in sufficient quantities. Actually there so many fat types and certain types have benefits for heart health?
Classification of fats and oils can be viewed from several aspects, one of which is its saturation aspect. They can be distinguished based on its double bonds. Saturated (SFA) if it doesn’t has any double bond and unsaturated if it has one, two or three double bonds.
Examples of unsaturated fat
There are so many kind of agricultural product which contain high UFA, such as sunflower, canola, olive, soybean, peanut, flax seed, and fish oil.
The examples mentioned above, more specifically also contain high essential fatty acids - linoleic acid (Omega 6), alpha linoleic acid (Omega 3) and arachidonic acid. The scientists found that they proved to have several important benefits such as helping the body burn the fat, lower bad cholesterol (LDL), helps in the lubrication of joints, prevent strokes, maintaining blood pressure, and optimize brain health.
Unsaturated fat benefits
Is good fat really exist? We always have long been told to limit the amount of fat in our diet in order to keep our cholesterol levels. The fact is, we need a certain amount of them in our diets. It helps us absorb essential vitamins like A, D, E, and K
A study by Grundy from the Faculty of Medicine, California, USA, proves that the body's cholesterol levels may go down if the diet contains more MUFA and PUFA than SFA. Dietary SFA for a month proved to raise cholesterol levels. While the dietary MUFA, dropped it sharply, including LDL and HDL. In dietary PUFA, LDL and total cholesterol decreased, while HDL relatively unchanged.
PUFA are known to increase the intelligence and the immune system of children under five. Long chain unsaturated fatty acid (especially the omega - 3 DHA) have been shown to play an important role in the prevention and treatment of blocked arteries (atherosclerosis), thrombosis, hypertriglyceridemia, and high blood pressure. It has the potential for prevention and treatment of asthma, arthritis, migraine, and some types of cancer which is prostate, breast and colon cancer.
Unsaturated fat types
Most of UFA are fatty acids containing one double bond in their hydrocarbon chain. Fatty acids with more than one double bond are unusual, mainly found in vegetable oil, and called by PUFA. Polyunsaturated triglycerides tend to form oil.
PUFA can lower total blood cholesterol, especially LDL. If you want to consume this, you can be choose fish, seafood, safflower oil (Carthamus tinctorius), and sun flower oil. MUFA can reduce the presence of bad fats in the blood, such as cholesterol. By consuming them, HDL rises and LDL cholesterol goes down. So, it is good to be eaten for health. It is contained in olive oil, canola oil peanut oils, meat, fish, poultry, and avocado.
Unsaturated fat health risk
Although it is considered as a good fat, excessive consumption of UFA remain dangerous. If the total fat intake is more than 30 percent of food consumed, fat deposits in the body will increase. It increases the risk factor of increased blood fat that can cause heart and blood vessel disease. UFA forms the cell wall of the body. Consumption of high UFA should be followed by adequate intake of antioxidants such as vitamin E.
SFA, UFA, and trans would enhance the body's calorie. The public still considers only SFA which is bad for health, which are widely found in meat and its derivative products and fried foods. Each 1 gram of fat contains 9 calories, whereas 1 gram of starchy produces only 4 calories.
In addition to long chain SFA, trans fats is also bad for health. These are produced through industrial processes, such as margarine and cooking oil. In food packaging, it is called as hydrogenated fat. They do not only increase LDL, but also lowers the amount of good cholesterol. Unlike the SFA that only increase LDL.
The role of unsaturated fatty acid need to be studied further to ensure the influence of food and agricultural products that contain these components on human health.

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How to choose healthy cooking oil

How to choose healthy cooking oil is generally an important consideration for the good housewives as they would fry food for their family. Frying is a food processing using a very high temperature with the aid of oil as the heat transfer medium. But because a small portion of them was absorbed by the fried food, then it should be good quality as this can affect the flavor (taste, flavor, and aroma) of fried foods.
Unethical advertising fool the consumers
The lack of knowledge of the housewives about cooking oil can result in disadvantages. Their consideration usually based on advertising or promotion by the manufacturer. Whereas in promoting their products, manufacturers often violate norms and business ethics. Coconut oil, used to be, is the only cooking oil that is used in Indonesia but is now being pressured by the market for palm oil. It contains saturated fatty acids (SFA) in high quantities so often 'accused' as the source of coronary heart disease.
Now, on the market many cooking oil made from raw materials such as coconut, palm, soybean, corn, and sunflower seed oil. Even some of that were a mixture of two kinds of the oil. In addition, there are also palm cooking oil which come from different manufacturing process than other vegetable oils. The first product is known as the product from single fractionation while the second from the double fractionation.
Through the heating and pressing, from palm fruit will be obtained crude palm oil (CPO) which is reddish orange because they contain beta-carotene (about 400-700 ppm). It is composed of two fractions: namely solid fraction (stearin) and liquid fraction (olein). To become a cooking oil, CPO is undergoing the first refining process, namely neutralization, washing, decolorization (bleaching), and odor removal (deodorization) to obtain refined bleached deodorized palm oil (RBDPO). The second refining is the fractionation process which is often also referred as the screening. It will separate the solid from the liquid by lowering the oil temperature (to 20 degrees Celsius) and then filtered the solid part.
The solid product contained in the liquid is known as the solid fat content (SFC). Palm oil obtained from a single fractionation process at a temperature of 10 degrees Celsius contains about 15-20% SFC, while those obtained from the double process only contains about 0-5% SFC. Double fractionated palm oil will always be liquid at low temperatures because the content of SFC was also low. While the single fractionated palm oil will freeze when soaked in ice water because the content was higher SFC. In other words, the content of unsaturated fatty acid (UFA) of double fractionated product is higher than the other one. This is then associated with the state of the oil (fat) in the body. It means if the oil (from the single process) is frozen in the ice water so it will also be frozen in the human body. Though the body temperature is about 37 celcius degrees and quiet different with the ice or refrigeration temperature. Of course this kind of advertising or promotion certainly fool consumers. Cooking oil was changed into solid phase when it is stored in the refrigerated room so that it would appear whitish. It does not mean that there were deterioration on their quality but because its SFA content is relatively high so it freezes faster than the product contains more UFA.
There are sometime cooking oil manufacturers who claim that their products do not contain cholesterol. This is completely misleading because all kinds of cooking oils derived from plant materials, does not contain cholesterol.
Oil saturation affects the health ?
People often consider the saturated fatty acid levels in the oil when they ask how to choose healthy cooking oil. Does that thought have strong support? Indeed, too much when we question its fatty acids composition. For example, certain cooking oils containing UFA are claimed to be better than oils containing SFA.
First, the amount of oil contained in fried foods is relatively small (except for the pan-fried food) and secondly, during the frying, UFA will be broken down due to high temperature during the frying (about 150-180 degrees Celsius). So that the amount of UFA are expected to be consumed, actually very little.
Coronary heart disease is not only due to the ingestion of SFA. Many other factors must be considered. It has been scientifically proven, the palm oil consumption, although it contain relatively high SFA, does not cause atherosclerosis (clogged arteries) and coronary heart disease. This is because its SFA containing medium carbon chain (unlike animal fat) in the body so it is more widely used as an energy source and does not raise cholesterol levels (LDL) in blood.
Excessive consumption of unsaturated fatty acids would endanger the health because it can form more radical compounds in the body. Something that can damage cells and tissues.
A study proves, the unsaturated fatty acids consumption will increase the chances of excessive destruction of blood vessels due to atherosclerosis by radical compounds. The experts always recommend the use of high UFA must be accompanied by a high consumption of vitamin E as well. Cardiologists Medical Association in U.S. recommends that consumption of oil / fat is limited to about 30% of total calories consumed (approximately 90-100 g of oil / fat per day). Oils / fats should consist of 10% SFA, 10% monounsaturated fatty acids (MUFA) and 10% poly unsaturated fatty acids (PUFA). This statement clearly indicates, the consumption of SFA are allowed in reasonable quantities. Especially if the source is only from of fried food.
Indeed there is scientific evidence that UFA can lower cholesterol levels and can prevent the atherosclerosis onset and coronary heart disease, but the oil must be consumed in a crude state. Not as cooking oil, such as salad oil (salad oil).
Other tips
How to choose healthy cooking oil can also be done simply. First, see the clarity and second, whether its smell is rancid or not. A good one is clear and no smell rancid.

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