REPUBLIKA.CO.ID, PALEMBANG -- South Sumatra has set a production target for palm oil at 3.4 million tons this year up 400,000 tons from last year.

Chairman of the South Sumatra branch of the Indonesian Association of Oil Palm Companies (Gapki) Harry Hartanto said with that production, the province could maintain its contribution at 10 percent to the country's total production of crude palm oil (CPO).

"Gapki has set a high target this year with the expansion of plantations amid favorable climate," Harry said here on Friday. 

There is no weather phenomenon El Nino expected this year, he said, adding, El Nino causes long drought which would result in a decline in palm oil production. 

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South Sumatra has around 1.3 million hectares of oil palm plantations of which 50 percent owned by farmers, and the rest owned by state plantation companies and private companies.

Harry said South Sumatra has the potential to produce 5 million tons of CPO a year as it has 70 factories with a processing capacity of 3,950 tons of fresh fruit bunches per hour.

However, there are a number of factors that the production fell below the potential, he said. 

One of the factors is that there has been no progress made in developing downstream industry in the province, he said. 

Development of the downstream industry has been concentrated in Java such as bio-diesel and oleo-chemical industries to be close to the consumers.

According to the Central Bureau of Statistic South Sumatra's exports of CPO has increased to US$48.86 million in February, 2017 from US$36.22 million in the same period last year.

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