Agricultural observer from the Center of Reform on Economics , Eliza Mardian, assessed that the export of palm kernel expeller or palm kernel cake shows that downstreaming of palm oil derivative products can be done without requiring large investments.
According to Eliza, PKE is a by-product of palm kernel processing that can provide higher economic value without requiring large investments to build downstream industries such as oleochemical factories.
He added that revenue from PKE sales could also increase palm oil mill (PKS) margins and indirectly support the price of fresh fruit bunches (FFB) received by farmers.
He said optimizing derivative products such as PKE could be part of a downstream palm oil industry strategy that could be implemented by utilizing existing processing capacity.
According to Eliza, PKE exports to New Zealand also demonstrate market opportunities for Indonesian palm oil derivative products in developed countries.
Although not a major market for Indonesian palm oil, New Zealand has a dairy industry that imports large quantities of PKE as a raw material for animal feed supplements.
"This demonstrates the potential for expanding market access to developed countries with stringent biosecurity standards ... it signals that opportunities also exist in the by-product and animal feed segments," he said.
The Lampung Animal, Fish, and Plant Quarantine Agency recently exported 14,000 tons of palm kernel expeller (PKE) or palm kernel meal to New Zealand with an economic value of around IDR 20 billion.
