REPUBLIKA.CO.ID, JAKARTA -- The government's alternative energy policy that necessitates crude palm oil (CPO) producers to sell 10 percent of their products in the domestic market is expected to curb the export of the commodity, stated an economist.

"The prices of global commodities, including CPO, continue to increase. But, the CPO export volume will not increase significantly following the implementation of the policy, which requires the CPO producers to sell 10 percent of their products in the domestic market," Faisal Basri of the University of Indonesia (UI) noted here on Wednesday.

Despite the rising price of CPO in the global market, its exports will not significantly contribute to the country's exports, he added.

"The producers will be forced to sell CPO in the domestic market as there is a domestic demand to produce biodiesel fuels for the state electricity company, PLN and state oil and gas company, Pertamina. So, millions of tons of CPO will not be exported," he explained.

The increase in the price of CPO in the domestic market will attract CPO producers to market their products at home, he remarked.

"The policy on the use of biodiesel fuels from CPO has also led to a price hike in the domestic market since the government announced the use of new and renewable energy," he claimed.

Despite the 10 percent duty on CPO exports, CPO and coal exports are forecast to have a bright prospect in 2014 and continued to show a positive trend in the fourth quarter of 2013, he added.

"Early this year, our exports are estimated to have increased significantly and are believed to be able to strengthen the rupiah's exchange rate," he stated.

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