Indonesia faces more barriers in palm oil exports


Indonesia is facing another trade barrier in its palm oil commodity exports after the one applied by European Community (EC) in April over green issue.

The freshest challenge was received from the Indian government which recently increased its import duty for Indonesian crude palm oil (CPO) entering the nation by 100 percent from 7.5-15 percent.

Moreover, the Indian government also raised import tariff of CPO derived products from 15 percent to 25 percent.

Indonesia regarded India's move to increase its tariff on Indonesian CPO palm oil products as an effort to impede the nation's prime export commodity after the one applied in Europe.

Indonesia's Trade Minister Enggartiasto Lukita said that the nation has to take serious attention on such an issue as it may prompt export reduction to India, a major market for Indonesian commodities.

"Indonesia's food industry has put India in number three of five largest economies that receive their products, including food processed products," the minister said recently.

He said that his office had already made contacts with Indian government related to Indonesia's complaint on India's increasing tariff for crude palm oil and its derived products.

Indonesia seized surplus in its bilateral trade with India at 4.21 billion U.S. dollars in the first five months this year, continuing the one it gained at 7.23 billion dollars throughout last year, according to data released by the trade ministry.

Apart from that, India also increased its import tariff for Indonesian vegetables oil, applied on soy oil from 12 to 17.5 percent and sunflower oil from 12.5 percent to 17.5 percent, adding up to the blows Indonesia to receive in its exports to India.

Indonesia, the world's largest palm oil exporter, saw its CPO exports to India grew significantly 43 percent to 3.8 million tons in the first half this year from 2.6 million tons in the corresponding period last year.

Indonesia and the second largest palm oil producer country, Malaysia, are now fighting against the European Community (EC) resolution on palm oil products that may further disrupt export of the commodity in Europe.

The EC ratified the resolution on Palm Oil and Deforestation of Rainforest that may prompt further difficulties to export Indonesian and Malaysian CPO and derived products to Europe.

Indonesia and Malaysia said that environmental issue should not be used as means to discriminate or restrict trade.


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