The Indonesian Palm Oil Association (Gapki) is optimistic that Indonesia can win a legal case against the European Union’s (EU) palm oil discriminatory policy in the World Trade Organization (WTO).

As previously reported, Indonesia, the world’s largest producer of palm oil, will file a lawsuit to the WTO regarding the discriminatory step taken by the European Union (EU) against the Indonesian crude palm oil (CPO). The EU had recently issued a policy called the renewable energy directive (RED) II, which will phase out the use of CPO as the raw material to produce biodiesel.

“Indonesia has a chance to win the discriminatory legal case with WTO,” Gapki Chairman Joko Supriyono told Kontan.co.id on Sunday, 7 June 2020.

Indonesia is seen necessary to file the lawsuit to the WTO to prevent such policy applied by other countries as it is potential to reduce Indonesia’s CPO exports.

Gapki has stated its support for the Indonesian government in taking the legal case against the EU to the WTO, despite the fact that the EU policy has yet to be implemented.

“No impact yet. The CPO exports are still normal. It will start being implemented in stages during the period of 2023 until fully implemented in 2030,” said Joko.

The trade ministry’s Trade Security Director Pradnyawati also told Kontan.co.id on Sunday, 7 June 2020, that Indonesia has been ready with all necessary documents for the filing request to the WTO.

Pradnyawati said that Indonesia’s request to the WTO to set up a panel to adjudicate the unfair trade case is still pending until the WTO reopens its office. Currently, the WTO office is still closed due to the outbreak of Coronavirus disease 2019 (Covid-19). “We’re waiting for the reopening of the WTO office,” she said.

The CPO production during the period of January – March 2020 decreased by 14 percent as compared to that of the same period in 2019. But local consumption of CPO rose by 7.2 percent, while exports decreased by 16.5 percent with a total export value of US$5.32 billion or an increase of 9.45 percent from that of the same period last year.

The local consumption of palm oil for foods decreased by around 8.3 percent. But consumption of oleo-chemical product increased by 14.5 percent and local consumption of palm oil for biodiesel was relatively stable.

The demand for oleo-chemical product increased due to the rising demand of sanitizers as part of efforts to fight the outbreak of Coronavirus disease 2019 (Covid-19). Of the total 68,000 tons increase of oleo-chemical consumption, 55 percent was contributed by glycerin which is the raw material to produce hand sanitizers.

Source: KONTAN.CO.ID

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