Jakarta, Sept 21 (Antara) - Indonesia, the largest crude palm oil (CPO) producer country, which along with Malaysia controls some 80 percent of the CPO market in the world, has the potential to decide the commodity's business prospects.
Hence, the government needs to create an effective grand strategy related to the palm oil commodity, which is one of the leading export goods of the national economy.
"The government should have a grand strategy or a national oil road map," Hamdhani, a member of the House of Representatives' Commission IV on plantation affairs, noted in a release in Jakarta on Wednesday.
According to Hamdhani, palm oil production is proven to have overcome the economic disparities of people in several areas of the country, such as between Java and outside Java.
Hamdhani, who is a Nasdem Party politician, also pointed out that Malaysia, as a competitor country, has applied a standard rule; hence, if Indonesia does not formulate the right regulation, its position as a ruler of the CPO market could be taken over.
It is reported that Indonesia could lose its market in India if the government did not immediately conduct bilateral negotiations following the imposition of a two-fold import duty on CPO and its derivatives to the South Asian country.
India is the biggest importer of palm oil, with some eight to nine million tons per year. The European Union is the second-largest importer, with seven million tons, followed by China, with 6 million tons, and Pakistan, 2.5 million tons. India is unable to produce sufficient vegetable oil to fulfill the local demand, and during the 2013-2014 period, some 65 percent of the total domestic vegetable oil demand was met through oil imports.
"Besides being a large CPO export destination, India is not a fussy market demanding sustainability criteria such as that necessitated by Europe or the US. It is a pity if we are losing such a potential market," Joko Supriyono, chairman of the Indonesian Palm Oil Business Association, had remarked in a written statement following the event of the Indonesia-India Business Forum on Palm Oil in Mumbai on Wednesday (Sept 13).
The Indonesia-India Business Forum is a business meeting to discuss various issues related to bilateral trade between the two countries, especially related to the palm oil commodity.
As is known, the Ministry of Finance of India had announced in August 2017 the policy of increasing import duties on CPO to 15 percent, from the earlier 7.5 percent.
The import tax on refined palm oil also increased to 17.5 percent and 25 percent, from the earlier 12.5 percent and 15 percent. Palm oil classification is based on its level of quality.
Supriyono cautioned that the increase in import duty could reduce the exports of Indonesian palm oil to India, whereas Indonesia had currently recorded a trade balance surplus with India.
"This should continue to be strengthened, for instance, through bilateral trade agreements, so that tariff-related issues can be discussed and agreed upon comprehensively," the Gapki chairman emphasized.
Supriyono expressed hope that the Indonesian government would pay more serious attention to this issue and immediately discuss it bilaterally with the Indian government.
Indonesia's Trade Minister Enggartiasto Lukita, during a meeting with Indian Minister of Processed Food Harsimrat Kaur Badal in Jakarta last Month (Aug 23), had expressed concern over India's decision to raise the import duty on CPO, from 7.5 percent to 15 percent.
"We have expressed concern over the 100 percent increase in the import duty on palm oil," Lukita stated.
At the meeting, the Indian delegation had asserted to hold an internal discussion on Indonesia's objection.
"We will convey the Indonesian government's concern over the import duty to our related institution in order to find a solution," Badal explained.
Earlier, Deputy Minister of Foreign Affairs of Indonesia A.M. Fachir had noted that the Indonesian government always ensured that the domestic palm oil industry applies the principles of environmental sustainability.
"Since long, Indonesia had initiated efforts to build a sustainable palm oil industry. Due to the contribution of the palm oil industry to the Indonesian economy, the Government of Indonesia is interested in ensuring that the industry adopts principles of sustainability," Fachir stated as conveyed in a press statement from the Ministry of Foreign Affairs received in Jakarta, Tuesday (Sept 12).
In 2016, Indonesia had produced over 35 million tons of crude palm oil, and 25 million tons are exported worldwide, mainly to India, China, Pakistan, and the Netherlands, bringing in US$17.8 billion in revenue, or about an eighth of the country's total export proceeds.
So far, the world price of CPO has been determined by the Rotterdam market. According to the Indonesian Palm Oil Producers Association (Gapki), the price of CPO has continued to fluctuate and touched the lowest level at $629 per ton at the Rotterdam CPO bourse in 2015, from the previous level of $831 per ton.
However, the price was relatively stable at the end of 2016, at about $670 per ton. Gapki had earlier forecast that the price of the commodity will hover between $680 and $690 per ton in 2017. In September, the price of CPO at the Rotterdam market is about $710 per ton.
***3***(A014/INE)EDITED BY INE(T.A014/A/BESSR/F. Assegaf) 21-09-2017 12:44 |
Tidak ada komentar:
Posting Komentar