JAKARTA – The Indonesian Palm Oil Association’s (GAPKI) Positive Campaign Division Head Edi Suhardi said that palm oil producers are optimistic that Indonesia’s exports of palm oil products will see a robust growth in the future due to market diversification efforts, while the impact of the implementation of European Union (EU) Deforestation-free Regulation (EUDR) will not be significant.
Edi Suhardi said that the producers’ optimism is based on the strategic steps that have been taken by the government and the palm oil industry players. “The strategic steps include their efforts of diversifying away from the traditional markets, especially the EU market, into non-traditional markets, which are very potential to absorb Indonesian palm oil products,” he said.
“Europe is no longer strategic. Together with Kemendag (trade ministry), we agree to diversify our export markets to countries in Africa, South Asia, and other regions,” Edi said on Thursday (29/08/2024) during the Trade Corner Special Dialogue with the theme “Strategy, Optimism in Foreign Trade Policy and Challenges in WTO”.
Based on data from Statistics Indonesia (BPS), Indonesia’s export volume of crude palm oil (CPO) and derivative products in July 2024 reached 1.62 million tons, which sharply decreased year on year (yoy) from that of July 2023 at 2.75 million tons. The export value of CPO and derivative products also dropped by 39.22 percent (yoy) from US$2.28 billion in July 2023 to US$1.39 billion in July 2024. Month on month (mtm), the export value of CPO and derivative products also dropped by 36.37 percent to US$2.18 billion in July 2024.
Regarding the EUDR, he said it will not cause any significant impact to Indonesian palm oil industries. “There will be no significant economic impacts. Perhaps, it will just function like a wake up call. It’s because Indonesia has the capability to find other export markets outside EU. The government has been pursuing diplomatic efforts to crack open new export markets for palm oil in the Middle East and South Asia,” he said.
But he noted that the EUDR impacts will possibly hit independent smallholders, who only have small size of plantations and unable to comply with the requirements.
He said that to keep generating a strong growth of palm oil industries, all stakeholders should realize the importance of strengthening the existing markets and taking strategic steps of tapping new potential markets. (*) Source: CNBC Indonesia
