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Section 1: Palm Oil Price Fundamentals:
Indonesia Palm Oil Biodiesel Reform
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By: Mr. Arif P Rachmat
Co-Founder & CEO of Triputra Agro Persada (TAP) Group, a palm oil plantation of over 170,000Ha and over 30,000 employees.
Board of Director of Triputra Investindo Arya, a holding company with significant investment in various businesses such as Adaro Group (coal energy), DSN group (palm oil and wood), Kirana Megatara (crumb rubber processor and exporter) amongst others.
Board of Advisor at TNC (The Nature Conservancy)- Indonesia, Rabobank Food Agri in Asia, GAPKI (Indonesian Palm Oil Association), and CSIS (Centre for Strategic and International Studies). Head of Permanent Committee on Food-Agri and Forestry on Indonesian Chamber of Commerce and Industry (KADIN Indonesia), and GK Indonesia foundation. Member of Young Global Leaders of the World Economic Forum, Young Presidents Organization, and Indonesia Business Association (APINDO).
Master and B.S. in Operations Research and Industrial Engineering from Cornell University, Ithaca, NY. Upon graduation, worked for General Electric Company in the U.S. and globally for 7 years in various leadership roles.
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In 2013 I have thought that biodiesel is one of the most important factor in maintaining CPO price stability. This is evidenced by the weakening of prices in 2015. The Government of Indonesia initiative to implement mandatory biodiesel program for Public Service Obligation (PSO) through the establishment of CPO Fund and its supporting regulations resulted in a rise in CPO price throughout 2016. The fund was obtained from the palm oil industry through the palm oil export levy. It is collected for the benefit of the oil industry itself.
In the early year of 2017 there was a slight decrease in price due to the increasing supply of CPO more rapidly than market demand. Efforts are needed to increase demand further. The potential way is going through mandatory biodiesel in the Non-Public Service Obligation (Non-PSO) market sector.
It should be ensured that biodiesel raw material, the CPO, are sustainable. This is required to support market expectations for environmentally friendly renewable energy and reductions in greenhouse gas emissions. In this case, intensification is the key to increasing Indonesian CPO production.
In this presentation, it will be discussed how the process occurs, the challenges and strategies for the future to ensure that this mechanism works well.
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Section 1: Palm Oil Price Fundamentals |
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Archives |
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MITIGATING THE NEXT WAVE OF MARKET UNCERTAINTIES Nov 14, '22 ~ Nov 18, '22 |
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ASSESSING 2022: MANAGING OPPORTUNITIES AND RISKS Mar 28, '22 ~ Apr 01, '22 |
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Section 2: Opportunities for Palm Oil in Asian Market Oct 18, '21 ~ Oct 24, '21 |
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Section 1: Oils & Fats Supply, Demand and Outlook Oct 18, '21 ~ Oct 24, '21 |
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Section 1: Price Direction Apr 05, '21 ~ Apr 11, '21 |
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Section 2 : Special Focus on the US Apr 05, '21 ~ Apr 11, '21 |
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POINTERS ON THE PRICE TRENDS Jun 22, '20 ~ Jun 28, '20 |
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Section 1 : CPO Price Trend Feb 24, '20 ~ Mar 01, '20 |
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Section 2: Global Palm Oil Market Opportunities Feb 24, '20 ~ Mar 01, '20 |
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Section 2: Special Focus Aug 19, '19 ~ Aug 25, '19 |
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Section 1 : CPO Price Trend Aug 19, '19 ~ Aug 25, '19 |
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Special Focus - India Feb 25, '19 ~ Feb 24, '19 |
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Section 1: CPO Price Trend Feb 18, '19 ~ Feb 24, '19 |
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Section 2: Global Palm Oil Market Focus Aug 06, '18 ~ Aug 12, '18 |
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Section 1: CPO Price Trend Aug 06, '18 ~ Aug 12, '18 |
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Section 2 : Global Palm Oil Market Focus Jan 29, '18 ~ Feb 04, '18 |
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Section 1: CPO Price Trend Jan 29, '18 ~ Feb 04, '18 |
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Section 2: Regional Focus : CIS Countries Aug 21, '17 ~ Aug 27, '17 |
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Section 1: Palm Oil Price Fundamentals Aug 21, '17 ~ Aug 27, '17 |
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Section 2: Market Challenges and Opportunities Feb 20, '17 ~ Feb 26, '17 |
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Section 1: Price Directions Feb 20, '17 ~ Feb 26, '17 |
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Section 1 : Palm Oil Price Fundamentals Aug 22, '16 ~ Aug 28, '16 |
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Section 2 : Trade Issues and Market Prospects Aug 22, '16 ~ Aug 28, '16 |
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2016 Market Direction - Twists and Turns of Palm Oil Prices Feb 22, '16 ~ Feb 29, '16 |
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Second Half 2015 - Anticipating Market Price Direction Aug 17, '15 ~ Aug 23, '15 |
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Special Focus: Indian Sub-Continent Aug 17, '15 ~ Aug 23, '15 |
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Opportunities, Challenges And Trend In 2015 CPO Price Feb 23, '15 ~ Mar 01, '15 |
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2nd Half 2014: Market Challenges, Predictions And Directions Aug 25, '14 ~ Aug 31, '14 |
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Anticipating 2014 Palm Oil Price Direction Feb 17, '14 ~ Feb 24, '14 |
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Prospects For Second Half Of 2013 - Managing Price Fluctuations Jul 22, '13 ~ Jul 29, '13 |
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Mapping The Palm Oil Price - 2013 Market Perspective Feb 18, '13 ~ Feb 27, '13 |
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Palm Oil : Challenges, Opportunities And Latest Market Directions Aug 06, '12 ~ Aug 17, '12 |
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2012 Price Direction, Issues & Challenges Feb 13, '12 ~ Feb 20, '12 |
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Challenges, Opportunities And Latest Price Trend Aug 08, '11 ~ Aug 16, '11 |
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Challenges, Opportunities And Price Direction Feb 07, '11 ~ Feb 17, '11 |
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2010 Year End Prospects - What Lies Ahead? Aug 02, '10 ~ Aug 08, '10 |
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Production cost of biodiesel varies across producers and the variance depends on producers technology efficiency, vertical integration of its value chain, access to feedstock, depreciation of their plans and so forth. Having said that, I believe the price level of 100 USD Ton still reflects fair and feasible level of pricing considering that the oil price has came down quite a bit, which reflects in lower chemicals costs such as methanol.
6 years ago
We understand that China’s NDC’s targets, if reached, would result in GHG emission levels of roughly 12.8–14.3 GtCO2e in 2030, a 64%–70% reduction of emissions intensity below 2005 levels (IEA World Energy Outlook 2016 & climateactiontracker.org). Biodiesel would potentially be an alternative biofuel in addition of current china’s effort to expand the use of ethanol. This effort may take some times. As reported in the paper, the Government of Indonesia is in close communication to the Government of China in this subject.
6 years ago
BPDPKS, the Indonesia CPO Fund Agency, assures there are no holding back factors, but administrative and technical errands in nature. The Government of Indonesia has already provided set of regulations as the foundation for implementation of mandatory B20. Moreover, Pertamina expanding biodiesel blending logistic facility in almost all delivery points in Indonesia.
6 years ago
It is said that Indonesia’s CPO export tax and levy gives the Indonesian refiners the power to provide discounts to your importers. Is it true? No, it is not true. Benefit of levy collected by CPO fund is directly given to support biodiesel domestic consumption only. Is there any action taken by Indonesia on the possibility of EU’s ban on the usage of palm oil in biofuel in Europe in 2020? Palm oil is green energy (see our explanation: “Utilization of Biodiesel Reduce GHG Emission”) Why it should be banned by EU? We believe the Government of Indonesia takes appropriate actions in regard to the possibility of EU’s ban, including potential market such as China and India. Question should be directly addressed to the Government of Indonesia.
6 years ago