The Palm Scribe

Indonesia Seeks Lower Import Duties for CPO in South America and India

Indonesia is intensively working to expand its palm oil market, including by seeking lower import duties for the commodity in South American countries and India, several ministers said.

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Minister for Foreign Affairs Retno Marsudi, currently on a visit to several Latin American countries including Argentina and Peru, is making an effort to get lower import duties for the palm oil commodity in the Mercosur trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay, according to a press release of the Ministry of Foreign Affairs obtained by The Palm Scribe on Wednesday (23/5).

“Palm oil is an important commodity for the Indonesian economy and people. Indonesia is hoping that Mercosur countries including Argentina will consider reducing the palm oil levy,” Marsudi said when she was in Buenos Aires.

Marsudi explained that the import duties on palm oil charged by Mercosur countries were too high and asked Argentina to review and discuss the tariff issue on Indonesian crude palm oil (CPO) with the trade block.

Indonesia is the world’s top palm oil producer while Argentina is one of the largest exporters of soybean products, including soy-based biodiesel.

Bilateral trade value between Indonesia and Argentina reached $1.42 billion in 2017.

Marsudi also expressed the potentials of product diversification in the bilateral trade with Argentina. In addition to commodities and consumer products such as footwear, clothing, and electronics, Indonesia has advanced strategic industries as well.

“Indonesian strategic industries are getting more advanced, with great quality and much in demand by many countries. Indonesia hopes that Argentina will also buy various products produced by the Indonesian strategic industries,” Marsudi said.

Meanwhile, Trade Minister Enggartiasto Lukita said the Government would discuss with the Indian government on their plan to raise import duties on Indonesian palm oil and its derivatives.

India, which imposes import duties of 7.5 to 15 percent on Indonesian palm oil, and 25 percent for the derivatives, is going to raise the levy on crude palm oil and the derivatives to 45 and 54 percent respectively

“At the end of this month, the Indian prime minister will come, and we will talk more about this,” Lukita said on Wednesday (23/5), as reported by the Indonesian Oil Palm Estate Fund (BPDPKS) in its official website.

The Indonesian Palm Oil Producers Association (GAPKI) data shows that Indonesian CPO exports to India reached 7.63 million tons in 2017, or increased 32.01 percent from the previous year. The figure accounted for 24.05 percent of the country’s total CPO export that year.

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