RI TO FIGHT FOR INCLUSION OF CPO INTO APEC'S LIST

By Andi Abdussalam

Jakarta, Sept 28 (Antara) - Indonesia will fight for the inclusion of crude palm oil (CPO) onto the Asia-Pacific Economic Cooperation (APEC) List of Environmentally-Friendly Goods during next week's APEC summit in Bali.         Indonesian Trade Minister Gita Wirjawan said that Indonesia would take its rubber and crude palm oil products to the APEC forum for discussion so that they would be included among the list of goods which enjoy tariff reductions.         "We set a target, that by 2015 our agro-industry products would be included among environmentally-friendly goods and would enjoy a maximum tariff reduction," the trade minister said, during a discussion with journalists at the Ministry of Trade on Thursday.         In September 2012, leaders and representatives from 21 member economies of APEC approved a list of 54 environmentally -friendly goods at their summit in Vladivostok, Russia, which will receive tariff reductions of up to 5 percent by 2015.         However, CPO, one of Indonesia's mainstay products, was not included in the list.           The Indonesian Association of Palm Oil Companies (GAPKI) regretted the APEC rejection of the Indonesian proposal, asking for the inclusion of palm oil on the list.         Yet, the Indonesian Chamber of Commerce and Industry (Kadin) remains optimistic that CPO would later be added to the list of APEC's green products.  The approved items are not green goods themselves, but rather goods that are conducive to environmental protection.         "The exclusion of CPO from the list of environmentally-friendly products approved during a recent APEC meeting is not really a failure. It is only a matter of time (before crude palm oil is included in the list) and the Indonesian government is still fighting to this end," said Kadin Chairman Suryo B Sulisto, not long after the Vladivostok summit.         Therefore, Minister Gita said Indonesia would consistently fight for its rubber and palm oil products to obtain tariff reductions in 2015. But it should not be voiced by Indonesia alone, as other developing countries, which have the same interest, could take part to speak for the same issue.         In June this year, Indonesia again failed to have included CPO and rubber, as well as their derivative products, in the list during the APEC ministerial meeting  in Surabaya, East Java.         Therefore, Siswono Yudhohusodo, a member of the House of Representatives (DPR) Commission IV from the Golkar Party, urged the government to resume the fight at the coming APEC meeting.         He also said the Indonesian government must press the European Union and United States during the upcoming Asia-Pacific Economic Cooperation (APEC) Summit in Bali to open their markets to crude palm oil (CPO).         The summit will provide momentum to pressure industrial countries to include agro-based products in the APEC List of Environmentally-Friendly Goods, he said.           The government's intention to win inclusion of CPO and rubber products to APEC's list at Surabaya's meeting failed because advanced countries said these products had not yet met required qualifications.         Indonesia's CPO was denied inclusion onto the list because advanced states said it had not yet met the required environmental standards set by the United States Environmental Protection Agency (EPA).         Based upon EPA standards announced on January 28, 2012, the fuel standard of Indonesia's CPO was classified as Renewable Fuel Standards (RFS).         Following tests conducted by the EPA, Indonesia's CPO failed to meet the maximum emission standard of 17 percent with its emissions still registering at a range of 20 percent.         As a result, Indonesia's CPO failed to be included in the list of commodities which could enjoy a tariff reduction of up to five percent. This causes Indonesia's CPO to have lower competitiveness and is feared will reduce Indonesia's CPO exports.         "Indonesia, which will host the APEC Summit next month, has been the world's largest palm oil producer for the last five years. If necessary, the government should press for the adoption of CPO reference prices in Indonesian rupiah, rather than Malaysian ringgit," said Yudhohusodo, who is also a former farmers association chairman.          Yudhohusodo also pointed out that Indonesia had overtaken Malaysia as the world's largest palm oil producer five years ago. Indonesia's 2013 CPO production is projected to reach 25 million tons, well above Malaysia's CPO production forecast of 18.9 million tons, he stated.          As the world's largest CPO producer, Indonesia should play a more dominant role in CPO trade, he pointed out.          He added that global CPO consumption had risen by 7 percent annually. Also, the global CPO price was currently more than double the production cost of CPO over the past few years, Yudhohusodo stated.         Palm oil, along with canola and soybean oil, currently dominates the global vegetable oil market, he said, adding that Asia was a major market for palm oil, Europe for canola oil and America for soybean oil.          He said that CPO was more competitive and efficient, compared with canola and soybean commodities, which was why, according to the former transmigration minister, the United States and Europe were trying to put pressure on the Asian CPO market.          "It is the competitive edge of CPO which makes the United States and Europe think of hampering the entry of CPO,"  Yudhohusodo said.          He added that as the host of the upcoming APEC summit, Indonesia should take a firmer stance. It should not necessarily be ashamed to become a leader in a sector it has dominated, moreover, CPO was a major foreign exchange contributor from the export sector.          At present, the crude palm oil industry is the country's second largest foreign exchange earner, after the oil and gas sector.          Indonesia is the world's largest CPO producer, with an annual production of about 24 million tons, and has oil palm plantations covering 7.3 million hectares of land area.          In 2011, its CPO production was recorded at 23.5 million tons, of which some 16.6 million tons were exported. Palm oil production in 2010, meanwhile, was recorded at about 22 million tons, with only 15.6 million tons being exported.          By 2020 Indonesia expects to increase its annual production of CPO to 40 million tons. This figures give Indonesia the potential to become the exclusive CPO supplier for the world market in the future.***3*** (T.A014/INE/H-YH) (EDITED BY INE) (T.A014/A/BESSR/A/Yosep) 28-09-2013 20: