MARKET DEVELOPMENT
Palm Oil Group Seeks Govt Support Over Trade Challenges
Palm Oil Group Seeks Govt Support Over Trade Challenges
14/02/2014 (Jakarta Post) - The Indonesian Palm Oil Producers Association (Gapki) is seeking government support to deal with trade challenges affecting the industry, including anti-dumping duties levied by the European Union (EU).
The association intends to discuss the trade issues with Muhammad Lutfi as soon as he is inaugurated as trade minister, replacing Gita Wirjawan who resigned on Jan. 31.
“We are currently preparing a list of issues we would like raise with the new trade minister, which he could then present to the President,” said Gapki chairman Joefly J. Bahroeny.
Meanwhile, Gapki executive director Fadhil Hasan said the association wanted to discuss several important issues with the new trade minister.
“As the former Investment Coordinating Board chairman, Lutfi has gained sufficient knowledge about palm oil. Hence, we are confident it will not take long for him to share our concerns,” he said.
He added that the first issue the association wanted the new minister to tackle was anti-dumping duties levied by the EU.
The EU announced it would levy five-year tariffs on biodiesel from Indonesia and Argentina. The tariffs could reach a maximum of ¤245.67 (US$335.85) per metric ton, or 25.7 percent of its price.
It made the decision after an investigation commissioned by the European Biodiesel Board found that imports from Indonesia had surged between 2008 and 2011, resulting in the country’s market share expanding to 9.7 percent from 1.4 percent.
The EU has been critical of the lower price of Indonesian biofuel, which is a result of the country having an abundance of palm oil. Palm oil-based biofuel costs $200 per ton less than biofuel from other vegetable oils.
Indonesian biofuel producers intend to contest the ruling.
Fadhil added that Gapki would also like to touch upon food labeling regulations in the EU with the minister. “The regulation will take effect in 2014,” he said.
The regulation, passed in 2011, requires food items to sport a separate label detailing the various vegetable content.
He added that the new minister needed to address the issues to avoid a “smear campaign” against the industry. “This is what we consider economic diplomacy in dealing with barriers in the palm oil trade,” he pointed out.
In addition, Gapki also hailed the message conveyed by President Susilo Bambang Yudhoyono at a press briefing on Wednesday, when he instructed the new trade minister to carry out effective diplomacy to facilitate palm oil trade because it served as the “backbone of the country’s exports”.
Joefly said industry players considered the President’s message “supportive”, and said that Gapki aimed to meet with the new trade minister “as soon as next week”.
“We believe that the new trade minister will show concern for the challenges we face,” he said.
Gapki predicts that exports this year will stay close to the 2013 level of 21.2 million tons, given that plantations will allocate much of production to the growing domestic market.
Domestic demand is bound rise due to the new biodiesel policy, requiring more biodiesel in blended fuels to 10 percent from 7.5 percent. Power plants are also obligated to blend in 20 percent of biodiesel in their energy mix.
The association intends to discuss the trade issues with Muhammad Lutfi as soon as he is inaugurated as trade minister, replacing Gita Wirjawan who resigned on Jan. 31.
“We are currently preparing a list of issues we would like raise with the new trade minister, which he could then present to the President,” said Gapki chairman Joefly J. Bahroeny.
Meanwhile, Gapki executive director Fadhil Hasan said the association wanted to discuss several important issues with the new trade minister.
“As the former Investment Coordinating Board chairman, Lutfi has gained sufficient knowledge about palm oil. Hence, we are confident it will not take long for him to share our concerns,” he said.
He added that the first issue the association wanted the new minister to tackle was anti-dumping duties levied by the EU.
The EU announced it would levy five-year tariffs on biodiesel from Indonesia and Argentina. The tariffs could reach a maximum of ¤245.67 (US$335.85) per metric ton, or 25.7 percent of its price.
It made the decision after an investigation commissioned by the European Biodiesel Board found that imports from Indonesia had surged between 2008 and 2011, resulting in the country’s market share expanding to 9.7 percent from 1.4 percent.
The EU has been critical of the lower price of Indonesian biofuel, which is a result of the country having an abundance of palm oil. Palm oil-based biofuel costs $200 per ton less than biofuel from other vegetable oils.
Indonesian biofuel producers intend to contest the ruling.
Fadhil added that Gapki would also like to touch upon food labeling regulations in the EU with the minister. “The regulation will take effect in 2014,” he said.
The regulation, passed in 2011, requires food items to sport a separate label detailing the various vegetable content.
He added that the new minister needed to address the issues to avoid a “smear campaign” against the industry. “This is what we consider economic diplomacy in dealing with barriers in the palm oil trade,” he pointed out.
In addition, Gapki also hailed the message conveyed by President Susilo Bambang Yudhoyono at a press briefing on Wednesday, when he instructed the new trade minister to carry out effective diplomacy to facilitate palm oil trade because it served as the “backbone of the country’s exports”.
Joefly said industry players considered the President’s message “supportive”, and said that Gapki aimed to meet with the new trade minister “as soon as next week”.
“We believe that the new trade minister will show concern for the challenges we face,” he said.
Gapki predicts that exports this year will stay close to the 2013 level of 21.2 million tons, given that plantations will allocate much of production to the growing domestic market.
Domestic demand is bound rise due to the new biodiesel policy, requiring more biodiesel in blended fuels to 10 percent from 7.5 percent. Power plants are also obligated to blend in 20 percent of biodiesel in their energy mix.