Economists believe that increasing competitiveness supported by innovation is key to ensuring sustainable growth in exports of Indonesian palm oil derivative products amid increasingly stringent international trade standards and changing global market dynamics.
Center of Economic and Law Studies researcher Isnawati Hidayah said Indonesia cannot rely solely on its status as the world's largest palm oil producer because future export competitiveness will increasingly be determined by the ability to meet sustainability, traceability , and low-emission standards.
"Indonesia needs to shift from exporting intermediate products to downstream products with higher added value and technological content so that it is not continuously dependent on fluctuations in primary commodity prices," Isnawati.
According to him, downstreaming remains an important strategy, but its implementation must be oriented towards improving quality, not simply adding types of export products.
He believes the government needs to encourage investment in innovation- and technology-based downstream industries so they can produce high-value-added products.
In addition, small farmers also need to be part of the value chain so that the benefits of downstreaming are not only enjoyed by large industries.
Isnawati added that increasing productivity should be done by optimizing existing land, rather than opening new areas that have the potential to encourage deforestation and reduce the competitiveness of Indonesian palm oil products in the long term.
Executive Director of the Institute for Development of Economics and Finance , Esther Sri Astuti, said that strategies to increase competitiveness also need to be implemented through product differentiation so that Indonesia does not only export crude palm oil
