The Palm Scribe

Impact of European Ban on Palm Oil Import on Indonesia

European Union’s policy to ban palm oil import for their renewable energy program will not significantly affect Indonesia, the world’s largest palm oil producer, but will affect other vegetable oil prices in Europe, according to a palm oil industry player.

oil palm tree ready to be harvested

According to Council of Palm Oil Producing Countries (CPOPC) Sustainable Development Program Director Fadhil Hasan, the EU’s palm oil import ban will not cause fluctuation in palm oil prices because the amount of EU palm oil consumption is relatively small compared to the total world demand for palm oil.

Palm oil exporters for European countries will incur huge losses and will expand areas to other vegetable oils. The price of other vegetable oils will rise due to supply and demand imbalance in Europe,” Hasan said during his presentation at Renewable Energy Directive II Seminar at IICC, Bogor on Tuesday, April 24, 2018.

Fadhil added that the ban on palm oil imports by EU is not a solution to deforestation problem. EU accuses palm oil producers of causing deforestation, while in fact, as we all know, that the leading cause of deforestation is animal farms and agriculture, in which several crops contributing, such as soybean, maize, palm oil, etc.

Indonesian government continues to communicate with the EU related to the palm oil industry through World Trade Organization (WTO), Food and Agriculture Organization (FAO), and United Nations Conference on Trade and Development (UNCTAD). The government’s role might not be enough, it takes effort from all stakeholders to provide a strong foundation for palm oil imports to be carried forward to the European countries.

Hasan thinks that Indonesian government needs to consistently establish relationships with academics, NGOs, and corporations to bring forward systematic diplomatic steps towards the EU.

Hasan emphasized that now is the right momentum to promote Indonesian Sustainable Palm Oil (ISPO) to the international community to gain a more credible sustainable guideline status.  

“This is our golden chance to introduce ISPO to international market so that ISPO is recognized,” he said.

At the same time, Indonesian Sustainable Palm Oil (ISPO) Commission Daily Chairman Rosediana Suharto said that it is not easy for ISPO because it is considered more inferior than RSPO and not all business players, as well as local smallholders apply ISPO certification.

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