Indonesia already has a policy to promote the downstream palm oil industry. Indeed, prior to 2008, the downstream industry proceeded in a revolutionary manner without support in the form of policy focusing on the downstream palm oil industry. Since 2008, downstream policy has become increasingly focused and intensive, especially to maintain the rapid growth of CPO production.
Generally, there are three strategy paths for boosting the downstream palm oil industry in the country, namely (1) the oleofood downstream line (cooking oil, margarine, specialty fats and other oleofood), (2) the oleochemical downstream line to produce more downstream products such as surfactant, lubricant and others and (3) the biodiesel downstream line to produce fatty acid methyl ester as a substitute for fossil fuel. These various downstream lines are expected to generate more value-added downstream palm oil products.
According to the Indonesian input-output table data, the palm oil industry’s added value has grown from year to year (Figure). Growth of added value occurs in oil palm plantations and in the downstream palm oil industries. It is estimated that the growth of added value will be more rapid and widespread because of the acceleration of downstream palm oil and the ongoing increasing productivity of oil palm plantations.