Analysis of prospects of crude palm oil (CPO) in west Sumatra province

Abstract

Crude Palm oil (CPO) exports in West Sumatra have a high potential for competitiveness both in the domestic market and in the international market, as world demand for CPO is still quite high supported by the availability of oil palm, the availability of relatively human resources and the low cost of palm oil maintenance. On the other hand, it shows the competitiveness of CPO from the quality aspect is still quite low. It can be seen that the quality of fruit palm oil from farmers is still far below the quality standards set by the government and foreign standards so that it has implications for the low quality of CPO produced. The purpose of this study is to analyze the existing condition of the current CPO trade in West Sumatra Province, observed from the competitiveness of quality and quantity and the prediction of world demand for West Sumatra CPO. Data collection techniques with primary data were obtained through direct interviews with several CPO processing plants located in West Sumatra Province and secondary data were obtained through the Plantation, Food Crops and Horticulture Services of West Sumatra province. The method used to analyze CPO export competitiveness using the Trade Specialization Index (TSI). The results of this study stated that the value of TSI of CPO in West Sumatra Province show a value close to one which indicated that West Sumatra CPO production is at the maturation stage, in the sense of being in the industrialization stage to downstream products and the development of CPO commodity trade patterns in West Sumatra Province that able to compete with other plantation commodities, both in the domestic and international markets.