ESSENTIAL OIL RESOURCES PRODUCING DEVISA IN THE POST PANDEMIC COVID-19 ECONOMIC RECOVERY

Indonesia as a tropical country has a very high biodiversity in the form of abundant natural resources, both on land, air and in the waters. According to Arbain (in Darwis, 2004) no less than 17% of plant species are in Indonesia.

The overall potential of these natural resources is a high-value economic resource if used properly, for example by processing leaves or flowers from plants to be made into products in the form of essential oils. Essential oils or also called essential oils, etherial oils, or volatile oils are one of the commodities that have great potential in Indonesia. Essential oils are natural extracts from certain types of plants, both derived from leaves, flowers, wood, seeds and even flower buds.

There are at least 70 types of essential oils that have been traded on the international market and 40 of them can be produced in Indonesia (Lutony, Rahmayati, 2000). The development of the Indonesian essential oil industry is very slow in the sense that it has not been able to meet international market demand. The Indonesian essential oil industry is still has a very wide opportunity. According to the Chairperson of the Indonesian Atsiri Council (2015), the main production of Indonesian essential oils is clove leaf, stem oil, citronella oil, patchouli oil, kayuputih oil, cajuput oil and turpentine oil. The world trade value of essential oils is estimated at USD 4,000,000,000, while the total export of Indonesian essential oils has only reached USD 120,000,000, whereas in terms of types there are 300 types of essential oils in world trade, while the types of essential oils that are currently and potentially being developed in Indonesia exist 40 types.

Data from the Director General of Small and Medium Enterprises in 2003-2008 showed the value of Indonesian essential oil exports was lower than the import value of essential oil derivative products. The trend continues to this day. A large population and better economic capacity are a market destination for various commodities, which is a concern if the commodity is essential oil.

Based on the description above, the potential of Indonesian essential oils needs to be developed to provide added value of essential oils through increased production, improved quality and product diversification. This industry as a source of foreign exchange that needs to be upgraded to export quality because it has been proven to contribute to foreign exchange from year to year.