Sunday, 16 September 2007

Indonesia beckons foreign palm oil companies

The Star online, Malaysia

Thursday September 13, 2007

Indonesia beckons foreign palm oil companies

JAKARTA: Indonesia, the world's biggest palm oil producer, wants foreigners to develop new plantations and may prevent them from acquiring existing operations, the agriculture minister said yesterday.

Overseas firms should buy new land and cultivate oil palms, the fruit of which is crushed to produce crude palm oil, instead of acquiring plantations from small holders, Anton Apriantono told reporters. The government aims to limit foreign control of strategic industries.

Plantation companies in Indonesia are expanding to benefit from higher prices of edible oils. Palm oil on the Malaysia Derivatives Exchange, the benchmark contract, has risen 26% this year, and traded at RM2,518 a tonne at the end of morning trading.

“We want small-holder plantations to continue to exist,'' Apriantono said. Indonesia plans to add 1.5 million hectares of oil palm plantations in the next three years to the current area of about six million, a government official has said.

Of the planned expansion, 1.375 million hectares would come from newly cleared land, while a further 125,000 hectares would be re-plantings of existing plantations, said Rosediana Suharto, chairwoman of the Indonesian Palm Oil Committee. Oil palms last about 25 years, after which they need replacing. – Bloomberg