06/02/2012 (Pakistan Observer) - Indonesia’s crude palm oil sales to Pakistan are expected to more than triple this year as a result of a cut in import duties imposed by Islamabad following a trade pact signed on Friday, the Pakistani ambassador said.

The preferential trade agreement (PTA) approved in September but formally signed on Friday, will result in Pakistan lowering its duty by 15 percent on crude palm oil from the world’s top producer.

“In 2010 Indonesia exported CPO to Pakistan worth $77 million,” Sanaullah, the Pakistani ambassador to Indonesia, told reporters. “I am hopeful, with the PTA, it will rise to $300 million or even more than that this year.”

The two countries had been discussing the proposed PTA for several years.The signed agreement will be ratified by both governments within a month, Sanaullah added.

Currently, Pakistan applies a duty of 9,500-10,800 rupees ($110-$120) per tonne on Indonesian palm oil products. In 2007-2008, Indonesia’s CPO exports to Pakistan was worth $500 million, but fell to under $100 million in the following years after Pakistan switched to Malaysia after a similar trade agreement on duties four years ago. Overall output in Indonesia, which overtook Malaysia as No. 1 palm oil producer in 2007, is expected to be about 25 million to 26 million tonnes this year. Sumatra, Kalimantan and Sulawesi are the main producing areas for palm oil which is used in products such as food, cosmetics, tyres and biofuel.—Agencies