EU implements II renewable energy directive Palm oil producers continue to increase production

Palm oil (CPO) faces even more serious challenges, especially from the outside world. Palm oil producers are facing the EU’s negative publicity campaign on palm oil, which is affecting commodity prices.

Nonetheless, palm oil producers still expressed optimism that production will increase. Astra Agro Lestari (AALI) said it is not directly affected by EU policy. Tofan Mahdi, deputy general manager of Astra Agro Lestari’s communications, said, “We have not refined biodiesel and there is no EU export market.”

The EU began implementing the Renewable Energy Directive II policy. This policy affects the export of palm oil to Europe.

Last year, the EU market contributed 4.5 million tons to 5 million tons of total palm oil exports. The Astra Agro Lestari company exports only 40.6%. The remaining 59.4% is supplied to the domestic market. Emerging markets in the outer European region have contributed even more, from 6 million to 7 million tons. Astra Agro Lestari fully adapts palm oil prices to market mechanisms. Astra Agro Lestari has always strived to improve efficiency and productivity.

As of the first quarter of this year, Astra Agro Lestari’s financial results were unsatisfactory. Astra Agro Lestari’s revenue reached 4.23 mega dong, down from 4.45 mega dong in the same period last year.

Net profit fell from 373.40 billion dong to 3.982 billion dong. “The above situation is due to the impact of the decline in the price of palm oil from Astra Agro Lestari, especially in the fourth quarter of last year,” he said.

In addition, Dharma Satya Nusantara (DSNG) managed to survive under the influence of negative publicity and strive to maintain increased palm oil production. Supriyadi Jamhir, Corporate Communications Director of Dharma Satya Nusantara, said that he is still convinced that the future of palm oil will be better because of the mandatory policy of 20% biodiesel (B20) last September and plans to develop 30% biodiesel this year. “There is still a negative publicity campaign for palm commodities this year, but we hope not to affect the demand for palm oil,” he said.

By the first quarter of this year, Dharma Satya Nusantara’s palm oil production reached 129000 tons, an increase of 61% over the same period last year. The company’s sales in the first quarter of this year reached 1.37 trillion rupiah, an increase of about 42% over the same period last year.