The Palm Scribe

Indonesia mulls the  possibility of dropping all palm oil exports to Europe

The government of the world’s top palm oil producer, and consumer, Indonesia, is currently conducting a study to examine the risks, costs, and consequences of halting all palm oil exports to the European Union, which it has accused of being discriminatory against the oil that is now the country’s top export commodity.
Jakarta Foreign Correspondent Club discussed palm oil industry

“There is now an ongoing study by the Indonesian side, to examine stopping all exports of palm oil to the European Union, earlier than in 2021, if the worst case happened,” Mahendra Siregar, former deputy trade minister who now is the executive chairman of the Council of Palm Oil Producing Countries (COPC) said here on Friday (25/5).

2021 refers to the date the European Union is planning to halt the palm oil exports under its current renewable energy program. Indonesia and the world’s second-largest palm oil producer, Malaysia, have strongly protested the plan accusing the European Union of being discriminatory against palm oil as the other vegetable oils were not similarly targeted.

“If that is the case (worst-case scenario), then, I think, it is important for Indonesia, or for that matter the whole of the producing countries, to understand the risks, the costs and the consequences and then deal with it,” Siregar added, while addressing a forum of foreign journalists here.

Siregar said that the European Union was anyway now only consuming 11 percent of the world’s palm oil supply, an amount that was far lower than in the 1990s.  He said that dropping all palm oil exports to the European Union should not carry too many consequences.

“Now Europe consumes 11 percent of all palm oil in the world, so it is a matter of how to accelerate the decline even further so that the impact is even more negligible,

Indonesia and Malaysia, which account for some 87 percent of the world’s palm oil supply, are still seething from the vote of the European Parliament in January this year that is seeking to vet out palm oil from its renewable energy program from 2021 citing that the commodity was a major cause behind deforestation.

in a related development, the Indonesian Association of Processed Vegetable Oil has expressed concerns that the European Union may be dumping its vegetable oils in Indonesia.

Siregar, speaking at the same occasion, announced that the “Indonesian Processed Vegetable Oil Association has expressed concerns that European-branded vegetable oils are being dumped in Indonesia causing injury to the domestic industry.”

He added that the early focus now was on examining, all portfolio of vegetable oils in general, adding that the Indonesian industry did not differentiate between the different oilseeds, either on trade or environmental ground.

“An examination is also being undertaken as to whether the vegetable oil is subsidized. If there is sufficient evidence to justify a proceeding, the domestic industry will lodge a complaint to the Anti-Dumping Agency against all imports from the EU,” he said.

Speaking to journalists after the forum, Siregar said that the association was suspecting that the vegetable oils from Europe were sold here at a lower price than at where they are produced.

On acceptance of the complaint, the anti-dumping agency will conduct its own investigation and if evidence is found supporting the complaint, it may decide on slapping anti-dumping charges against the oils from Europe, produced from rapeseed, canola, olive, sunflower seeds or corn.

“This is a matter of fair trade principle,” Siregar said.

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