The Cooperation of Japan-Indonesia in the Oil Palm Sector

Abstract

Indonesia and Japan have established cooperation in various fields including investment and exportimport of oil palm sector. Although Indonesia has the largest palm oil production in the world, palm oil exports from Indonesia to Japan are lower than Malaysia. This research aims to explore the cooperation of Japan-Indonesia in the oil palm sector mainly in export-import and investment. Research uses quantitative and qualitative approach. Quantitative data were collected from various agencies in Indonesia while qualitative data conducted with in-depth interviews on various stakeholders. The result of the study shows that in 2018 Indonesia is the second largest supplier of oil palm in Japan with 40.0 percent share while Malaysia is the largest supplier with a 59.1% share. The export value of Indonesian oil palm products to Japan in 2018 is US$ 217.7 million. The trend of oil palm export in the last five years reached 30.24%. Indonesia has big opportunity to increase oil palm exports to Japan because Indonesia is the largest oil palm producer in the world. On the other hand, the demand of vegetable oil in Japan continues to increase both for renewable energy sources, cosmetic industry and cooking oil. Palm oil also has greater productivity compared to other vegetable plants. The development of oil palm exports has some challenges, especially market competition, product quality, export procedures, and negative campaign of oil palm plantation. With the negative campaign, the palm oil market is hampered because many Japanese companies require RSPO certification. Keywords— cooperation, palm oil, investment