MEDAN – In a global market that is not only increasingly competitive but also increasingly protectionist, the Indonesian palm oil industry needed to urgently raise its competitiveness or loose it all, Chairman of the Indonesian Association of Palm Oil Producers (Gapki), Joko Supriyono said here.
Speaking while closing the second Indonesia Palm Oil Stakeholder Forum in Medan (28/09/2017), Supriyono pointed out that Indonesia’s palm oil industry was highly dependent on export markets.
“Seventy percent of our palm oil production, whether we are willing or not, are actually going to the export market. Our fate depends on these export markets and we cannot ignore these export markets,” Supriyono said.
However, these export markets were increasingly becoming competitive or even protective and therefore hard work was needed to keep Indonesian palm oil exports up.
“We are facing increasingly protectionist countries, we are facing increasingly competitive markets,” Supriyono said.
He spoke of India, Indonesia’s largest market, having doubled import duty for palm oil, making Indonesian palm oil much less attractive compared to oil from soy bean or sunflower seeds.
The United States, another major market for Indonesian palm oil, was now planning to slap anti-dumping charges on biodiesel from Indonesia and the European Union is seeing increasingly stricter measures against palm oil imports that included higher sustainability criteria and a prohibition of the use of palm oil for biofuels.
“We have a high dependence on export markets, therefore willing or not, we must study and negotiate, and find out what are actually the requirements of this global market?” he said.
Supriyono said that competitiveness was paramount if the Indonesian palm oil industry wanted to survive.
“An important factor is competitiveness. Without this, we will not be able to progress forward. If in the future, we do not deal with this competitiveness, then we will be finished,” he said.
The palm oil sector was not only facing problem related to its export markets, but also other problems at home, such as regulations that were not friendly to the business and industry.
He said that Gapki was now focusing on addressing this issue of regulations that do not promote the palm oil industry but instead is hindering it by setting up an advocacy campaign against them.
Another problem that needed to be addressed is how the industry can continue to increase productivity and efficiency.
And on top of that, not all stakeholder in the palm oil industry in the country were on the same wavelength. “We do not yet speak the same language,” he said.
However he said the president was fully aware of the palm oil issues faced by the industry and was fully supportive of the industry.
“Let us have a sense of great optimism in building this industry in the future. Be convinced that this industry will really develop in the future. But this will also depend on ourselves.”
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