GAPKI Chairman: Palm Oil Should Become Spearhead In Global Trade

Amid the outbreak of Covid-19 pandemic, the government should be serious in overcoming all obstacles facing the palm oil industry. The fact that the palm oil industry has significantly contributed to Indonesia’s total non-oil-gas exports deserves the government’s special attention.

During the period of January – May 2020, the export of crude palm oil (CPO) and derivative products reached USD7.6 billion, which accounts for 12.5 percent of the total non-oil-gas exports. The total value is also higher than the export during the same period last year.

Considering the big contribution, it is just normal that Gapki Chairman Joko Supriyono asked the government to make the palm oil exports as the spearhead to succeed in the international trade.

He hopes that the government will prioritize the solutions for various obstacles in the foreign trade. “Finding solutions to the trade problems should be  the main goal of the government. For example, by strengthening the G to G,” Joko said during a Webinar organized by Forum Jurnalis Sawit (FJS), a journalist forum specializing on palm oil industry, with the theme of “Uplifting Domestic Market and Export of Indonesia’s Palm Oil” in Jakarta on Thursday.

Regarding Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) that is not yet completed, Joko asked the government to be consistent in fighting for Indonesian palm oil at the international market. He said that the government should be consistent in implementing all prevailing regulations. One of them is concerned with the over dimension over load (ODOL). “The government has taken the right step in No Palm Oil No CEPA. In this case, it should be consistent,” he said.

The Indonesian Palm Oil Council (DMSI) Chairman Derom Bangun said that Indonesia’s total exports of palm oil are dominated by exports to India, EU, China, Pakistan, Bangladesh, USA, Middle East, and Africa.

Derom said that during the outbreak of Covid-19, the demand for palm oil and related products had been eroded, along with other vegetable oils besides palm oil. During June 2020, the demand for palm oil in India dropped by up to 56 percent. “Unlike other products of vegetable oils, Indonesia’s palm oil is weak in promotions and advertisements,” said Derom.

Regarding the government’s policy in pushing up the use of palm oil for biofuel production, he is optimistic to see the domestic market. But he said it needs some time to conduct a serious assessment by involving all stakeholders. “For example the D100. Pertamina has stated it is good. The team of  ITB (Bandung Institute of Technology) also stated it is good based on their study. But it still needs to be discussed with other related industries,” he said.

Despite of global demand decline due to the Covid-19 pandemic, the trade ministry’s national export development director general Kasan said that he is still optimistic on future recovery of Indonesia’s palm oil export and derivative products. “But we need to watch out the declining trend of Indonesian palm oil exports during the last three years,” said Kasan.

According to him, the monthly exports of CPO and derivative products dropped since the outbreak of Covid-19 pandemic, especially if compared to exports in December 2019, which reached total value of US$15.98 billion, or 53.5 percent of the total global export market. “During the period of 2015-2019 palm oil exports had dropped by 0.04 percent,” he said.

Meanwhile, Sri Adiningsih, a professor of economics with Gajah Mada University said that in 2018 a total of 65 percent of Indonesia’s CPO product was exported and the rest was absorbed at domestic market. “The export value and contribution of palm oil are higher than other strategic commodities. It means that the national palm oil industry has a very good performance,” said Sri Adiningsih.

She said that during the ongoing Covid-19 pandemic the palm oil industry needs to undergo a transformation due to the application of new normal, which requires a change of global economy and lifestyle.

She said that the palm oil industry should also change its mindset from pure plantation business to processing industry, including the bioenergy. “Indonesia is potential to become the world’s largest producer of bioenergy,” she said.

Source: Koran Sindo