Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Indonesia plans palm oil plantations in Zimbabwe

Phillimon Mhlanga, Business Reporter

THE world’s largest producer of palm oil, Indonesia, is contemplating establishing palm plantations in Zimbabwe to produce palm oil, an edible vegetable oil derived from the palm fruit, an official has said.

Hutomo Bayu, the third secretary at the embassy of Indonesia in Zimbabwe, disclosed that discussions with the government to develop a business case to establish the palm oil sector in the country at a commercial level were in progress.

“We are looking at Zimbabwe with the view to setting up palm oil plantations around the country. There are discussions happening at the moment as we are looking to take advantage of SEZs (special economic zones). If everything goes smoothly, we should be able to set up the plantations by mid next year,” Bayu told The Financial Gazette last week.

“It’s a presidential mandate to come to Africa and Zimbabwe is a destination of choice. It’s actually a priority for us. We have the capacity to do and run plantations. We have successfully done it in Nigeria where we are working very well with the government of that country. We are also working with the governments of Zambia and Namibia on the plantation projects.”

Zimbabwe last year promulgated the SEZ Act in a bid to attract foreign direct investment, generate employment and promote exports.

Palm oil plantations in Indonesia cover almost 11 million hectares of the country, the equivalent of a third of Zimbabwe’s total land area.

New plantations have been increasing at a rate of between 300 000 and 500 000 hectares a year for the past 10 years, Bayu said.

Indonesia aims to raise production to 40 million tonnes by 2020, up from 35 million tonnes in 2016.

Currently, Indonesia is the largest exporter of palm oil in the world, with production accounting for close to 20 percent of the country’s export earnings of about US$6 billion.

According to the Indonesian Palm Oil Association, one third of production is attributed to smallholder farmers, with multinationals accounting for the larger part of output.

The World Bank recently reported that nearly 50 percent of crude palm oil produced in Indonesia is exported in an unprocessed form, while the remaining is subject to processing into cooking oil out of which about 50 percent is exported and the balance is consumed locally.

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