At the recent RGE Journalism Workshop held in Singapore, Asian Agri’s Managing Director Kelvin Tio provided an overview on the palm oil industry to the journalists participating in the workshop. He said that Indonesia is still the biggest producer of palm oil in the world, producing 30 mn MT in 2013, which accounted for 53% of the global volume. Indonesia’s output surpassed that of Malaysia, which produced 19 mn MT in 2013.
By 2020, the global palm oil production is expected to reach 78 mn MT, one of the reasons being the growing demand for food in countries such as Bangladesh, Pakistan and USA. Indonesia is expected to drive growth of the palm oil industry given the limited land in Malaysia.
Palm oil cultivation makes the most efficient use of arable land. Kelvin explained that palm oil only utilizes 6% of land for vegetable oil cultivation, and yet is able to contribute 38% of the edible oil industry. In other words, palm oil is the most efficient vegetable oil, yielding 7-10 times more than other types of vegetable oils.
In Indonesia, palm oil industry contributed 1.6% of Gross Domestic Product (GDP) and 11% of total exports valued at US $ 20 billion. 42% of the plantations are owned by smallholders, supplying 36% of total Indonesian palm oil production. The average income of these smallholders is generally higher than the national average, which results in improving their standards of living.
Kelvin also explained to the journalists about Asian Agri’s sustainable development model, which drives positive socio-economy impact for people and communities. Asian Agri has a successful partnership for close to 27 years in managing 60,000 ha of plasma smallholders estates or 29,000 plasma smallholders. 71 smallholders co-operatives have been built to coordinate and assist farmers on day to day operational coordination, fertilizer recommendation, heavy equipment availability etc. In November 2014, Asian Agri won a Gold Medal at the 2014 Indonesia CSR Awards for its unique partnership between PT Inti Indosawit Subur and the association of independent growers ‘Amanah’ in Ukui, Riau.
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