Observer: Palm Oil Exports Will Still Increase Up To Next 10 Years

By : Hariyanto And Aldo Bella Putra | Tuesday, February 06 2018 - 20:00 IWST

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INDUSTRY.co.id - Jakarta - Central Bureau of Statistics (BPS) noted that Indonesia's trade balance in 2017 experienced a surplus of US $ 11.84 billion. In response, economic observer Bustanul Arifin predicts up to 10 years, the volume and export value of palm oil and its derivative products will continue to increase.

"In 2016 the export value of palm oil and its derivative products (excluding biodiesel and oleochemicals) amounted to US $ 18.22 billion, this year skyrocketed at US $ 22.97 billion or increased by 26%," he said, Monday (5/2 / 2018).

Professor of Faculty of Agriculture University of Lampung (Unila) was admitted not surprised by the figures released by the BPS, because the export volume of palm oil is directly proportional to production.

"I'm not too surprised by the figures, because the export value of palm is directly proportional to the production, let alone the average price also increases, and the trend of this export increase in 2018 will still happen because the weather is also supportive," he said.

Nevertheless, he reminded business and government players that the issue of sustainability will continue to be an obstacle.

"This should be resolved, the government should continue to conduct trade diplomacy, otherwise this huge potential of foreign exchange could be lost because this is one of the trade barriers, tariff barrier," he said.

In addition, the government must intensively open new export markets, such as countries in Central Africa, South Africa, the Russian fraction countries, countries in the Middle East are considered as a prospective market.

However, Bustanul also warned that traditional export destinations such as Western Europe, the US, Japan, India, Pakistan, China are not abandoned.

"We have to be smart and smart in developing a potential new market, but do not be negligent by leaving the traditional market, because if it is unavoidable, the opportunity will be lost," he said.

According to him, various efforts to inhibit the growth of palm oil industry will continue to be launched due to increasingly tight competition in vegetable oil trade.

"In this condition, the government should be more observant in looking at the problems and not issuing regulations that actually hinder the development of palm oil industry which in fact is the largest foreign exchange generator machine in supporting the national economy," said Bustanul.

Economist from Bhima Yudhistira, Institute for Development of Economics & Finance (Indef), said that up to now Indonesia is still glued to traditional markets which account for about 70 percent of the total export destination countries.

"We are still not open to new markets, Pakistan, Eastern Europe, South Africa, South Africa is also very potential, so in 2018 we have to open the alternative market," he said.

In addition, he added, the government should be able to trade diplomacy with export destination countries, because each country always applies tariffs and non-tariff. The United States for example, currently implements more protective trade policies.

Currently the US has implemented more than 2,000 non-tariff barriers, China has 4,000 non-tariff barriers, while Indonesia has only 299 non-tariff barriers.

"That's why we cannot get into their markets, we must strengthen trade diplomacy both bilaterally and multilaterally so that non-tariff barriers can be reduced," he said.

Indonesia which has palmed as a potential commodity, according to Bhima, must be kept and fought, especially in trade dispute in WTO forum.

The governments of Indonesia and Malaysia, as the two major producing countries of world oil palm must jointly diplomat. The government should be more active in the WTO forum in order to win in the face of trade disputes.

"Moreover, as long as we lack an appeal team in the WTO, so to deal with trade disputes, this should be strengthened." Our intelligence market is also lacking, which is very important," he said.

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