South Asia is A Strategic Palm Oil Market for Indonesia

KARACHI, SAWIT INDONESIA – Pakistan is a strategic market for Indonesian palm oil. Therefore the sustainability of the Pakistan market and other countries in South Asia has to be maintained.

With the total volume of Indonesian palm oil export to Pakistan reached 2.5 million tons in 2018, Pakistan is the fourth biggest importer of Indonesian palm oil after India, China and European Union.

“Amidst pressure and trade discrimination from the European Union on palm oil sector, South Asia is a strategic market that needs to be maintained. Aside from Pakistan, of course it would be India and Bangladesh,” said Mukti, Executive Directors of Indonesian Palm Oil Association (IPOA) in middle of international palm oil conference event PEOC (Palm Edible Oil Conference) 2020 in Karachi, Pakistan

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Mukti also expressed his concern regarding the Indian market. As Indonesia’s largest palm oil export market, there is a downward trend in the volume of exports to India. In 2017, Indonesia’s palm oil export volume reached 7.6 million tons. This number drops to 6.7 million tons in 2018.

“This is very concerning. Up until October, the export volume was just 3,7 million tons”

Mukti said the decline in exports of palm oil products could not be separated from the import duty policy in India which imposed higher tariffs on Indonesian palm oil than from Malaysia.

“This makes our palm oil less competitive with Malaysia. But the policy has changed, now we have been charged the same rate as Malaysia, “said Mukti.

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Exports trend to India rose in October. At the end of 2019, the Indian government issued a policy of reducing import tariffs on palm oil products. This certainly gives a positive signal to Indonesian palm oil products. Unfortunately, in early 2020 India issued a policy banning the import of refined palm oil products.

“We are still waiting for the implementation of the new policy from the Indian government. Certainly, two of these policies are conflicting. And the policy that prohibiting the import of refined palm oil products can harm the export of Indonesian refined palm oil products, “he said.

Besides India and Pakistan, Mukti said the Bangladesh market also needed to be improved. At present, Indonesia’s palm oil exports to Bangladesh reach 1.4 million tons in 2018.

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