As the largest palm oil-producing country in the world, Indonesia is a suitable country for investment, especially in the palm oil sector. This is not a new thing anymore, where Indonesia is looking for many investors for oil palm plantations.
Palm oil processing in Indonesia has a very good process and produces the best palm oil in the world. In fact, since the 1990s Indonesia has succeeded in meeting the demand for palm oil in the global market.
Before palm oil is exported or distributed to the market, palm oil must be stored in a palm oil storage tank Indonesia.
Storage in the tank must also pay attention to the temperature, which should not exceed 55 degrees Celsius. Because if it is more than that temperature, oxidation and hydrolysis can occur in the palm oil in it.
This causes the quality of the oil to decrease. Indonesian palm oil is known as the best and clearest palm oil.
Is Palm Oil a Good Investment?
Indonesia has been known worldwide as a country that produces the largest palm oil in the world. Even 80% of the demand for palm oil in the global market has been met by Indonesia.
In 2021 the production of Crude Palm Oil (CPO) reached 46.88 million tons, even this figure decreased by 0.31% compared to 2020 which reached 47.03 million tons of palm oil.
However, this can be influenced by several factors such as extreme weather and limited fertilizers. In 2021, there will be an increase in palm oil consumption, which is as much as 18.42 million tons and higher than in 2020.
The Indonesian government is considered more consistent with the implementation of the mandatory biodiesel program which affects the export market for vegetable oil in the world. So that Indonesia can export more palm oil for biodiesel needs.
Unfortunately, in 2021, the export figure will fluctuate quite a bit. This is due to the COVID-19 pandemic which has had a very large impact on palm oil demand in importing countries.
However, this decrease does not make much difference. Because at the end of 2021 there will be an increase in palm oil exports and reach US$ 35 billion. This figure is much larger 52% compared to 2020.
Based on these data, it can be concluded that palm oil is suitable as an investment. However, several other things make palm oil suitable as an investment. Here’s the review:
- Indonesian Palm Oil Production and Export
As the largest palm oil-producing country, of course, many palm oil storage tank Indonesia save millions of tons of palm oil ready for export.
This indicates very good progress in palm oil production. The more palm oil is produced, the greater the exports.
Moreover, every year the number of world palm oil needs is increasing. So this makes Indonesia produce more palm oil.
Driven by increasing global demand, profits will also increase. In addition, oil palm cultivation can increase significantly by small farmers and large companies in Indonesia.
As we know, the palm oil plantation and processing industry are some of the keys to improving the Indonesian economy. So palm oil exports are a fairly high foreign exchange earner and help millions of people to find work.
Palm oil storage tank Indonesia is spread across various regions, especially in North Sumatra, which is the largest palm oil commodity in Indonesia.
- Palm Oil Export Tax Policy
Palm oil can be a good investment because the Indonesian government has a palm oil export tax policy.
To boost the development of the palm oil sector, this export tax was applied to refined oil in recent years.
CPO export taxes range from 0% to 22.5% depending on international palm oil prices. Meanwhile, Indonesia has an automatic mechanism policy, so when the CPO price falls below US$ 750 per metric ton, the export tax will be cut to 0%.
However, the export tax exemption makes the government not benefit. Therefore, the export tax policy is now being re-applied.
Moreover, several state-owned enterprises and other large companies that own most of the oil palm land also pay hefty taxes. This is what makes the palm oil industry suitable as an investment.
- Palm Oil Prices
Many investors are considering investing in palm oil. This is due to the fluctuating price.
Speaking of facts, the price of palm oil is also influenced by supply and demand. The more inventory, the lower the price. Conversely, when demand rises and supply is empty, the price can be very expensive.
Many smallholders often do not benefit from selling palm oil. Even though they account for 40% of oil palm land ownership.
Palm oil storage tank Indonesia is always fulfilled and export numbers are also increasing. The Indonesian government should make policies that benefit small farmers and there is no gap with big companies.