Banda Aceh (ANTARA) - The Indonesian Palm Oil Entrepreneurs Association (GAPKI) revealed that Indonesia's exports of crude palm oil (CPO) rose 18 percent in May 2019 as compared to that recorded in the previous month.

"Indonesian CPO exports in April were recorded at 2.01 million tons, while in May, the figure reached 2.40 million tons, an increase of 18 percent," Head of the Aceh Branch of GAPKI Sabri Basyah noted in Banda Aceh on Wednesday.

Basyah remarked that some of the main export destination countries have enacted regulations that fall in the category of trade barriers. For instance, India that had hiked import duty on palm oil to the highest.

"Indonesia is the largest palm oil producer in the world, and we hope that the Indonesian minister of trade would make a breakthrough, so that domestic palm oil farmers are not affected by the regulation," he explained.

The GAPKI Aceh branch head noted that Malaysia had acted promptly in the face of Indian regulations by utilizing a trade agreement in the form of the Comprehensive Economic Cooperation Agreement (CECA) signed since 2011, with further negotiations on free trade agreements resulting in lower import duty discounts as compared to the import duties imposed on Indonesia.

"Malaysian refined product tariffs are 45 percent of the applicable tariff of 54 percent," Basyah noted.

He further pointed out that owing to the discounted import tariffs enjoyed by Malaysia, the Indonesian palm oil market to India was increasingly eroded, and the Indian market was dominated by Malaysia.

"The Indonesian government is expected to immediately accelerate economic cooperation with India for the implementation of the same import tariff, so that Indonesia can compete to enliven the Indian market," he stated.

Data on Indonesia's exports of CPO and refined products in 1,000 tons comprised 604.21 in January, 516.53 in February, 194.41 in March, 1885.55 in April, and 341.80 in May. Exports of Malaysia's CPO and refined products in 1,000 tons constituted 327.58 in January, 457.76 in February, 354.65 in March, 532.48 in April, and 539.99 in May.

GAPKI recorded that the exports of CPO and its derivatives to the Blue Continent continued to decline. In April 2019, the exports of CPO and derivatives from Indonesia recorded a 37 percent drop as compared to 498.24 thousand tons in March and then again dropped four percent in May, reaching 302.16 thousand tons, as compared to 315.24 thousand tons in April.

Another major market for the exports of CPO and derivatives that also experienced dynamic movement was China. In April, China posted a 41 percent increase in the imports of CPO and its derivatives as compared to March, rising to 499.57 thousand tons from 353.46 thousand tons, while in May, it dropped 18 percent, or from 499.57 thousand tons down to 410.56 thousand tons. A similar trend was also observed in Bangladesh.
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Translator: Irman Yusuf/Eliswan Azly
Editor: Suharto
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