MARKET DEVELOPMENT
RI Aims To Double Palm Oil Export To Pakistan After PTA Takes Effect
RI Aims To Double Palm Oil Export To Pakistan After PTA Takes Effect
16/08/2013 (Jakarta Post) - As the preferential trade agreement (PTA) with Pakistan is expected to take effect in the next few weeks, Indonesia hopes to see its annual palm oil export to the South Asian country double in the upcoming years.
Deputy Trade Minister Bayu Krisnamurthi said the country might see its shipment to Pakistan reach US$1.5 billion starting from next year, up from $714 million last year.
“For this year alone, we hope exports to Pakistan will rise by around $200 to $300 million as it gets a boost by the PTA,” he said on Thursday.
Apart from becoming the market for Indonesia’s palm oil, Bayu added that Pakistan might serve as an export hub to surrounding countries.
The PTA will become effective as soon as both countries sign the mutual recognition agreement (MRA) and pest-area recognition for horticulture imports, both of which provide special entry access for Pakistani main export commodity, kinnow oranges.
Under the PTA that was sealed last year, Pakistan will slash import duties for Indonesia on palm oil to as low as it is for Malaysia. This policy is an exchange in the removal of 25 percent import duties on kinnow oranges, of which Pakistan is the largest producer worldwide.
The agreement should have taken effect this year, but has been delayed for months because of technical reasons, mainly the ban on kinnow oranges from entering Indonesian market through the country’s main port, Tanjung Priok Port in North Jakarta.
This ban is to comply with a series of import rules rolled out last year stipulating that shipment of fruits and vegetables can only enter the country via Tanjung Perak Port in Surabaya, East Java, and another five entry points, except Tanjung Priok Port, following poor supervision in the country’s biggest international trade gateway.
The port is not restricted for imports from countries sealing special arrangement with Indonesia, such as MRA and pest-free area recognition.
Bilateral trade between Indonesia and Pakistan amounted to $1.65 billion last year, up 44.74 percent from 2011, with Indonesia exporting $1.38 billion and importing $273.22 million.
Indonesian Palm Oil Producers Association (Gapki) executive director Fadhil Hasan echoed Bayu’s view, saying that the estimated increase in palm oil export to Pakistan would be feasible as in the past Indonesia, the world’s biggest palm oil exporter, was once the largest supplier of the commodity to Pakistani market.
Indonesian palm oil export lost ground in 2007 when Pakistan inked a PTA with Malaysia.
“However, to achieve the target, efforts to promote our commodity, penetrate the market and intensive interactions with business players in Pakistan will be necessary,” he said.
As Indonesia will get equal treatment as Malaysia, Fadhil said, local palm oil would be able to compete with its key competitor.
Responding this issue, Pakistani Ambassador to Indonesia Sanaullah said he appreciated the Indonesian government’s move to sign MRA with Pakistan following recent inspection of Pakistani facilities and kinnow farms in Karachi and other cities.
“The PTA would give multiple choices to Pakistan in the field of buying vegetable fat such as palm oil,” Sanaullah said in a statement sent to The Jakarta Post.
Deputy Trade Minister Bayu Krisnamurthi said the country might see its shipment to Pakistan reach US$1.5 billion starting from next year, up from $714 million last year.
“For this year alone, we hope exports to Pakistan will rise by around $200 to $300 million as it gets a boost by the PTA,” he said on Thursday.
Apart from becoming the market for Indonesia’s palm oil, Bayu added that Pakistan might serve as an export hub to surrounding countries.
The PTA will become effective as soon as both countries sign the mutual recognition agreement (MRA) and pest-area recognition for horticulture imports, both of which provide special entry access for Pakistani main export commodity, kinnow oranges.
Under the PTA that was sealed last year, Pakistan will slash import duties for Indonesia on palm oil to as low as it is for Malaysia. This policy is an exchange in the removal of 25 percent import duties on kinnow oranges, of which Pakistan is the largest producer worldwide.
The agreement should have taken effect this year, but has been delayed for months because of technical reasons, mainly the ban on kinnow oranges from entering Indonesian market through the country’s main port, Tanjung Priok Port in North Jakarta.
This ban is to comply with a series of import rules rolled out last year stipulating that shipment of fruits and vegetables can only enter the country via Tanjung Perak Port in Surabaya, East Java, and another five entry points, except Tanjung Priok Port, following poor supervision in the country’s biggest international trade gateway.
The port is not restricted for imports from countries sealing special arrangement with Indonesia, such as MRA and pest-free area recognition.
Bilateral trade between Indonesia and Pakistan amounted to $1.65 billion last year, up 44.74 percent from 2011, with Indonesia exporting $1.38 billion and importing $273.22 million.
Indonesian Palm Oil Producers Association (Gapki) executive director Fadhil Hasan echoed Bayu’s view, saying that the estimated increase in palm oil export to Pakistan would be feasible as in the past Indonesia, the world’s biggest palm oil exporter, was once the largest supplier of the commodity to Pakistani market.
Indonesian palm oil export lost ground in 2007 when Pakistan inked a PTA with Malaysia.
“However, to achieve the target, efforts to promote our commodity, penetrate the market and intensive interactions with business players in Pakistan will be necessary,” he said.
As Indonesia will get equal treatment as Malaysia, Fadhil said, local palm oil would be able to compete with its key competitor.
Responding this issue, Pakistani Ambassador to Indonesia Sanaullah said he appreciated the Indonesian government’s move to sign MRA with Pakistan following recent inspection of Pakistani facilities and kinnow farms in Karachi and other cities.
“The PTA would give multiple choices to Pakistan in the field of buying vegetable fat such as palm oil,” Sanaullah said in a statement sent to The Jakarta Post.