Commodity Buyers Representing 70% of China’s Palm Oil Imports arrive in Central Kalimantan for Inovasi Bumi (INOBU)-Solidaridad Network Field Tour

Commodity Buyers Representing 70% of China’s Palm Oil Imports arrive in Central Kalimantan for Inovasi Bumi (INOBU)-Solidaridad Network Field Tour

November 22, 2016


Indonesia is the world’s largest producer of palm oil. The greatest demand for Indonesia’s palm oil comes from India, China, and the European Union. Smallholder farmers have become an important part of the global supply chain, contributing an estimated 40% of supply on commodity markets. Making the palm oil commodity sustainable without excluding this segment of the supply chain requires understanding both the smallholder and the buyer of palm oil.

To promote cooperation and dialogue between large buyers of Indonesia’s palm oil and the smallholders meeting a significant proportion of their demand, this week Institut Penelitian Inovasi Bumi (INOBU), in collaboration with Solidaridad Network, will bring a delegation of Chinese palm oil buyers to Central Kalimantan province for Field Tour along with district leaders, farmer group representatives and other key stakeholders. The Chinese delegation includes representatives from COFCO, Sinograin, Julong, Wilmar China, and Fang Shun, representing an estimated 70% of all Indonesian palm oil import into China. This work is part of the Forest, Farms & Finance Initiative which is led by Earth Innovation Institute (EII) and funded by the Norwegian Agency for Development Cooperation (NORAD). INOBU also receives funding from the David and Lucille Packard Foundation and Germany’s Federal Ministry of the Environment, Nature Conservation, Building & Nuclear Safety.

Central Kalimantan province has become a focal point for the development of sustainable palm oil through jurisdictional certification. Two districts of Central Kalimantan, West Kotawaringin and Seruyan are piloting this approach with the help of INOBU. The governments of both districts are committed to sustainable palm oil in the region, with an emphasis on improving rural welfare, reducing deforestation and enhancing the recognition of cultural and indigenous rights.

The need for Chinese palm oil buyers to work collaboratively with smallholder farmers cannot be overstated. China imports 2.7 million tons of Palm Oil each year. Indonesia supplied about 1.2 million tons of Palm Oil to China, nearly half of Chinese imports. Through this field visit, the buyers and farmers can directly discuss and begin to tackle the challenges in the development of oil palm plantations. Solidaridad Network notes the importance for buyers to support sustainable supply of palm oil at this level to make it possible for smallholder farmers to participate in the market.

INOBU Managing Director, Joko Arif, described the two-day Field Tour as much needed, critical space to connect buyers with the districts and municipalities dedicated to producing sustainable palm oil. The delegation will visit local oil palm plantations, the orangutan conservation center, independent palm oil smallholders who have integrated with operations with dairy and cattle farming, as well as large companies and mills.  In West Kotawaringin, delegates will tour farms in the process of obtaining ISPO and RSPO certification. They will also visit plantations and palm oil mills to better understand the production and processing of palm oil.

“We in the District Seruyan have a vision that each producer of palm oil in Seruyan do so in a sustainable manner. We understand the ongoing process of getting certified is not easy, especially for smallholder palm oil farmers. It will take the participation of many stakeholder, including buyers, to accelerate the transition towards sustainability.”~ Honourable Regent Sudarsono.