Top palm oil producer Indonesia wants to be more refined

(CNBC) For decades, Indonesia has shipped out tanker loads of raw palm oil for processing into higher value cooking oil and margarine in Rotterdam, Mumbai and Kuala Lumpur.

Now, the world’s No. 1 producer of the edible oil is seeing a more than $2.5 billion wave of investment to build a refining industry that will double its capacity and mean it could supply the entire needs of Asia’s top food consumers – India and China.

Firms are building palm oil refineries across Indonesia to enhance the economics of their business. (picture credit Matti Blume)

The transformation – driven by Indonesia’s move to slash export duties for processed oil last October – will heat up competition with rivals such as Malaysia and send ripples through the palm oil market as new supply pressures prices of traded refined products such as palmolein, used as cooking oil.

Read full article by Chew Yee Kiat in CNBC