African region emerges as alternative palm oil export destination

African region emerges as alternative palm oil export destination

Several workers complete the construction of a crude palm oil factory in Padang, West Sumatra, Wednesday (15/1/2020). ANTARA/Iggoy El Fitra/ac.

Jakarta (ANTARA) - Nations in the African region hold potential market as alternative destinations for palm oil exports, according to the Indonesian Palm Oil Association (GAPKI).

GAPKI's Chairman, Joko Supriyono, highlighted that the market in the African region had become appealing owing to continued increasing trend in export growth on an annual basis despite orders being in smaller quantities.

Supriyono remarked in Jakarta on Tuesday that countries in the region would place export orders in smaller packs, including of 200 and 500 tons, though the market itself was huge. He noted that these specific issues are being monitored and noted down.

GAPKI's chairman expounded that based on the codes, 32 Indonesian palm oil products, including crude palm oil (CPO), were exported to Africa.

One product was processed palm oil in liquid form, with packaging of not over 25 kilograms, constituting 41 percent of the total palm oil exports to Africa.

Supriyono opined that developing the potential new market was one of the efforts undertaken by Indonesia at the time of weakening global demand for palm oil amid a global pandemic.

Moreover, Executive Director of the Indonesian Vegetable Oil Industry Association (GIMNI) Sahat Sinaga expounded that the African region, especially eastern Africa, with a population of nearly 380 million people in 18 countries, has undeniably become a potential market for palm oil commodities.

"The issue is that they do not have large tanks at the ports. Hence, they prefer to obtain oil in packages of under 25 kilograms," Sinaga explained.

Sinaga believes that it was also time for Indonesia to capitalize on the geographical conditions, where the coast of West Sumatra can be developed as an export point to India and Europe. Thus, a reduction of some US$8-10 per ton in logistics costs can be achieved, as compared to the exports made from Riau. Related news: Digitalization helps boost palm oil co performance amid COVID-19
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