According to Rabobank palm oil producing countries will need to increase palm plantations by 640,000 hectares per year to meet global demand for crude palm oil which is expected to be 68 million tons by 2020. Last year the industry produced only 26 million tons from 9 million hectares. The Indonesian government has a goal to produce 40 million tons of palm oil by 2020, however a new regulation will likely prevent producers from achieving this goal. Effective October 2, 2013 the Indonesian government enacted a law that a company or a group is only allowed to own a maximum of 100,000 hectares of land for new oil palm plantations. State-owned operations, publically listed companies whose majority of shares is owned by the public, and cooperatives are exempt. The regulation also stipulates that palm oil firms allocate a minimum of 20% of its plantations to plasma farmers. The head of operations for Wilmar Indonesia stated that the new regulation puts the company’s plans for expansion in doubt. The company produced 1.5 million tons of crude palm oil in 2013 at its 39 mills and owns the cooking oil brands Fortune and Sania. The company had planned to acquire land in the country to increase production to 10 million tons of crude palm oil by 2018.
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