INDONESIA – OPIEJ

WORLD PALM OIL SUPPLY FORECAST: REVIEW AND UPDATE

mpob_admin — Fri, 08 Sep 2023 08:58:04 +0000

Since the beginning of palm business in the 1960’s, world palm oil production has always shown an upward trend until the year 2019. Even though there were some occasions that made palm oil production go down, such as El Nino in the year 2015-2016, it was a temporary weather anomaly. However, this article explains that a structural, not a temporary, palm oil shortage may occur in 2-3 years. This article reviews the production data in the year 2019-2022 that was published by Minchul Suh (2020), mentioned as P.F hereinafter when the growth of the world’s palm oil production was stagnant. This article forecasts palm oil production in the year 2023-2025, by employing the age profiles of Malaysian and Indonesian oil palm plantations as well as the yield profile of oil palm. According to the methodology used in this article, even without any weather effects, the growth of palm oil production will be stagnant or can even decline until the year 2025.

TECHNICAL EFFICIENCY OF OIL PALM PLASMA SMALLHOLDERS IN INDONESIA

mpob_admin — Tue, 21 Mar 2023 00:00:49 +0000

This study examines the technical efficiency and influencing factors of oil palm production by plasma smallholders in Indonesia. The common method of analysis for this type of study is the stochastic frontier method based on the translog production function. The agricultural business household income survey (2013) of the Central Statistics Agency was used as a secondary data source where there were 2438 oil palm plasma smallholders registered in the Indonesian oil palm sector. The study found that the average value of technical efficiency of these plasma smallholders is 0.59 which means that there is room for improvements to increase it further. East Kalimantan has the highest efficiency value, compared to other provinces. Moreover, education and association memberships of smallholders, and seed quality had positive effects but the effect is negative with age of the smallholders in the oil palm sector in Indonesia. The distribution of technical efficiency level of farmers showed that only 0.94% of plasma farmers were efficient in their production. The Indonesian government should emphasize training programmes for plasma farmers to improve their efficiency in production

Interest Rate and Supply Response of Oil Palm Producers in Indonesia

mpob_admin — Thu, 30 Sep 2021 11:59:28 +0000

Supply response analysis of agricultural products remains feasiblein agricultural economics because of its relevance for producers andpolicymakers. This study estimates the extended Nerlovian model ofsupply response for the Indonesian oil palm producers, namely stateowned, private-owned, and smallholders. It mainly focuses on the impactof interest rate variation that reflects the cost of borrowing by producersfor replanting purpose. The data covers annual observations between1970 and 2017. The autoregressive distributed lag (ARDL) procedure andits non-linear form (NARDL) suggest a long-run relation of Indonesia’spalm oil supply response function, except for smallholders. In the longrun, a negative expected interest rate increases palm oil supply, especiallyfor the state-owned and private-owned producers. Oil palm producersare responsive to other supply response variables viz. relative prices,and government expenditure in the short-run. Similar findings observeif expected money supply replaces expected interest rate, to capturemonetary policy. Monetary policy by Bank Indonesia (Central Bank ofIndonesia) has an important implication to the palm oil sector.

Indonesian Oil Palm Competitiveness: PT Socfindo as a Private Sector Example

mpob_admin — Tue, 28 Aug 2018 05:06:45 +0000

PT Socfindo is a long established, foreign owned, plantation company with operations in North Sumatra and Aceh. This paper provides a brief review of the background situation to the Indonesian oil palm industry, whilst noting the continued rapid expansion of this sector. The paper also provides a detailed example of how, over the past 30 years, PT Socfindo has retained its competitive advantage in terms of production costs and profitability through the twin mechanisms of increased productivity (internal factor) and rupiah devaluation(external factor). Provided the continued improvement in productivity of every hectare of planted land can be sustained by progressive improvements in planting materials and agricultural practices, the future prospects of this company remain extremely positive. Therefore, the experience gained by PT Socfindo over this extended period of increasing competition and a declining trend in palm oil commodity prices, could act as an example for the new players to follow in order to sustain the competitiveness of the Indonesian oil palm sector