12 September 2022
Anonymous Writer
Exports play an important role in the world economy, including for developing countries such as Indonesia. In Indonesia, non-oil and gas exports receive more attention because they have greater opportunities to support economic growth, especially crude palm oil (CPO) commodities. The palm oil industry is one of the leading industrial sectors in Indonesia. Besides being utilized as a raw material for cooking oil whose production has referred to the quality and food safety standards (CODEX), palm oil can also be utilized as biodiesel fuel. Currently, Indonesia is one of the largest palm oil producers in the world, controlling a 62% share of the production market. As much as 60% of CPO products from Indonesia have been exported, and the rest is consumed domestically. This is supported by geographical suitability, the extent of oil palm plantations and their productivity, as well as the growing demand for CPO each year from several importing countries such as India, the European Union, China, and Africa.
However, in recent years, Indonesia has experienced a weakening trade balance due to low export growth compared to imports. The demand for sustainable palm oil processing, negative campaigns, and uneven plantation development are the causes of the decline in export power. To be able to maintain export growth, product competitiveness is needed, which is determined by the role of each actor in the value chain, from basic materials to the process of delivering products to consumers in foreign markets. Supply chains are dynamic in nature but involve three constant flows, namely the flow of information, products, and money. The key requirement in the supply chain is how to manage information. The movement of goods is entirely governed by information. In this era of globalization, times have become hypercompetitive. Companies are required to have value that can meet customer expectations. So, the goal of the supply chain to deliver value to customers is highly dependent on how to manage information. In this case, sustainability issues become very important in the supply chain that require special attention from palm oil industry players, including environmental, social, and economic aspects. Based on this, it is necessary to review the supply chain and several regulations related to palm oil processing and export. This review aims to map the palm oil commodity supply chain, analyze the capacity and quality of business actors, and analyze related regulations.
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