According to local media, Indonesian Vegetable Oil Refiners Association (GIMNI) spokesperson Sahat Sinaga was quoted as saying that apart from modernising existing seaports, the government would need to set up at least three seaports equipped with special terminals for palm oil exports to boost efficiency and anticipate future export volumes.
Sahat complained of high demurrage especially at Indonesia's ports which causes handling costs to be be as much as $15 to $20 per ton more compared to more efficient overseas ports such as Port Klang. He pointed to the poor condition of the main export port of Belawan in Medan, North Sumatra, where a vessel could queue for up to two weeks, as an example.
Sahat said if the ports were to be built, they would be potentially located in Mandailing Natal, North Sumatra; Pontianak, West Kalimantan; and Bitung, North Sulawesi, to transport palm oil output on each island.
Indonesia is the world’s top palm oil producer, and expects to exports to rise by 4.4% to 19m tons this year. The infrastructure deficiencies have rankled exporters because the government has reaped significant revenue from export taxes but have not returned the benefits to the industry in the forms of infrastructure development.
