MOSCOW – Indonesia is potential to increase its palm oil exports to Russia up to one million tons to meet the rising need of manufacturing industries in the country. Based on data from the Indonesian Palm Oil Association (GAPKI), in 2022 Indonesia’s palm oil export volume to Russia reached 668,340 tons.

“Currently, Indonesia’s palm oil exports to Russia are still below one million tons. But there is a big chance for Indonesia to increase its palm oil exports to Russia and other Eurasian countries,” GAPKI Chairman Eddy Martono said when contacted by mobile phone in Brussels on Monday, 29 May 2023.

Before the war of Russia-Ukraine in 2022, the palm oil export volume of Indonesia to Russia had been seeing a positive trend during the previous three years.

In 2021, Indonesia’s palm oil export volume to Russia reached 695,570 tons, which were higher if compared to that of the period of 2019 – 2020 at respectively 660,290 tons and 684,470 tons.

Eddy is optimistic that Indonesia can export up to one million tons of palm oil products to Russia, as the two countries are in good relations until now. But he said that in realizing the export target, Indonesia is facing three big challenges. First, the mechanism of palm oil export payment which has been affected by Russia-Ukraine war.

“Currently, Russian importers cannot use the facility of L/C (Letter of Credit) for the transaction payment of palm oil exports. We asked our bankers to help solve this payment problem,” Eddy, the native of Yogyakarta, said.

Second, not all Eurasian countries have the seaport facility for export and import. As a result, the shipping of palm oil from Indonesia to those countries will have to rely on other facilities at higher costs.

“This should be addressed. Will it need special hub or not and it’s certainly concerned with cost,” said Eddy.

The third challenge is related to the negative information that palm oil is not good for health. But palm oil in the country is not only used for foods, but also for non-foods, such as pharmaceuticals and cosmetics.

“Many Russian people consider palm oil not good for human health. But in fact, the palm oil is free of trans fat and is very rich in vitamin A and E,” he said.

According to him, GAPKI and the government will launch a positive campaign to promote palm oil among the people of Russia.

“If all of the challenges tackled, then we’re optimistic that Russia’s demand for Indonesia’s palm oil products will be increasing,” Eddy concluded. (*)

Source: sawitindonesia.com