Content ID

335083

Indonesia's oil palm plantations bigger than data shows - minister

By Fransiska Nangoy and Gayatri Suroyo

JAKARTA, Oct 24 (Reuters) - Indonesia has found the overall size of its palm oil plantations is bigger than its database shows, among several initial findings of a state audit of the industry aimed at improving governance, a senior minister said on Monday.

The world's top palm oil producer launched the audit following a cooking oil supply scarcity at home, which led to palm oil exports being stopped for three weeks from late April, shocking the global vegetable oil market.

The audit could also help the industry boost its productivity, Coordinating Minister of Maritime and Investment Affairs Luhut Pandjaitan told Reuters on Monday, adding Indonesia could produce 100 million tonnes of palm oil by 2040 if its replanting programme thrives.

The crude palm oil output was 46.9 million tonnes in 2021.

Authorities found Indonesia has 16.8 million hectare (41.5 million acres) of areas planted with palm oil, compared to its official figure of 16.38 million hectare during the audit's first stage, which has concluded, Luhut said. The government is collecting data on the size of each plantation, its land legality status, production level, and their palm oil selling prices, he said.

The audit seeks to improve transparency in the sector, making sure companies pay taxes properly, better protect the forest and improve output estimates.

"This would make Indonesia more efficient going forward," Luhut added.

The initial findings would soon be reported to the president, he said, without disclosing further details or when the full audit would be completed.

Luhut said planters found to have violated land use rules "will not be criminalised", but the government might collect a "reasonable amount" of fines.

The audit could also help increase the uptake of its palm tree replanting programme for small farmers, which has faced difficulties to take off as smallholders struggle to prove their land rights.

He said if the yield per hectare could be improved to 10 tonnes, from currently less than 4 tonnes per hectare, Indonesia could reach the 100 million tonnes mark annually without expanding the cultivation areas.

He said half of the output could be utilised for energy. Indonesia currently has mandatory B30 programme, which means 30% mix of its biofuel was made from palm oil, and is conducting road tests for B40. (Reporting by Fransiska Nangoy, Gayatri Suroyo; Editing by Martin Petty)

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