28/8/2003 - JAMBI, a province in Indonesia, has the potential to becomethe preferred site for oil palm investments in the country, said IndonesiaOil Palm Research Institute statistician Dr Lalang Buana.

He said Jambi's close proximity to Malaysia and Singapore would make itattractive to investors, particularly Malaysian plantation companies, toinvest in oil palm plantation and the palm oil industry in the province inthe near future.

To date, there are two Malaysian oil palm plantation companies withoperations in Jambi.

The Indonesian government has identified about 18 million ha suitable foroil palm development in its provinces such as Riau, Jambi and Kalimantan,which have the potential to become centres for the palm oil industry.

In his paper on Indonesia Palm Oil Industry: Current and Near TermScenario at the final day of the International Palm Oil Congress (PIPOC2003) organised by the Malaysian Palm Oil Board in Putrajaya yesterday,Lalang said Malaysian plantation companies seemed to prefer investing inRiau due to its big seaports in Dumai and Pekan, as well as its closeproximity to Malaysia and Singapore.

There are about 11 Malaysian companies now operating in Riau.

According to estimates by Directorate General for Estate Crop Production,oil palm plantations in Riau alone cover about 800,000 ha, Lalang said,adding that it was believed that the “actual oil palm plantation area inRiau has actually reached 1.1 million ha.

Indonesia is currently the world's second largest palm oil producer withestimated total production at 9.57 million tonnes this year and 10.5million tonnes next year.

Lalang said the country's palm oil production was expected to reach 10.76million tonnes in 2005 and increase further to 14.33 million tonnes by2010 on over 5.8 million ha of oil palm plantation.

On the demand for palm oil, Lalang said increasing demand would likelycome from China, India, Nigeria and even Indonesia.