Indonesia Targets Russian and Eurasian Markets, Barter Palm Oil With Jet

Photo by Ministry of Trade

JAKARTA (TheInsiderStories) – Indonesian Trade Ministry intensively boosted exports to global markets. One of the targets export to Russia and Eurasia as an entrances to Eastern Europe, said one senior official on Sunday (6/8). Minister of Trade Enggartiasto Lukita led a Trade Mission to Moscow on August, 3 to 5.

He said, Indonesia is trying to expand its trade and partnerships with Russia as that country is currently under a trade embargo with the United States and the European Union.

A substantive meeting was made by the minister with the Minister of Integration Affairs and Macroeconomics of the Eurasian Economic Commission Valovaya Tatyana Dmitriyevna during his visit in Russia.

At the meeting, Minister Valovaya responded to the official Indonesian request submitted in May 2017, to review together the possibility of holding trade negotiations between Indonesia and Eurasia. Both parties agreed to form a working groups to discuss trade issues while starting a joint review process related trade agreements.

“Eurasia consisting of Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia are markets Which we have not fully explored yet. However, from
Its market size reaches about 184 million people with a growing middle class
Quickly, Eurasia should get special attention, ” Mr. Lukita said in a press statement.

This group is expected to overcoming barriers to trade and investment, while building self-confidence to negotiate a legally binding trade agreement.

Based on the ministry data, the total trade of Indonesia-Eurasia reached US$2.3 billion with export value from Indonesia $1.28 billion and imports $1.03 billion. Thus, Indonesia notes surplus of $245.68 million.

Indonesia’s main export products to Eurasia include palm oil and its derivatives ($356 million); machinery or equipment for the treatment of materials by a change of temperature ($264 million); light vessels, fire floats, dredgers ($92 million); Coconut, palm kernel or babassu oil and fractions ($91 million); and coffee, whether or not roasted or decafein ($46 million).

Meanwhile, Indonesia’s main import products from Eurasia include mineral or chemical fertilizer, potassic ($310 million); semi-finished products of iron or non-alloy steel ($263 million); Sporting Shotguns and rifles ($74 million).

At the meeting, the minister also witnesses the signing agreement a preliminary deal to trade Sukhoi SU-35 jets for commodities such as palm oil and rubber between state-owned trading company PT Perusahaan Perdagangan Indonesia and the Russian state conglomerate Helicopters and United Helicopters (Rostec).

“This barter under the supervision of both governments hopefully will soon be realised through the exchange of eleven Sukhoi SU-35s and a number of Indonesian exports, starting from coffee and tea to palm oil and strategic defence products,” said Enggartiasto.

 

The Minister of Trade also hopes to accelerate the formation of Indonesia-Russia Preferential Trade Agreement (PTA) and Indonesia-Eurasian FTA in order to promote balanced trade with Russia and Eurasian countries.

The country led by President Vladimir Putin plays an important role in trade relations Indonesia. Russia becomes the gateway of Indonesian products to the Eurasian Economic Union zone, which is consisting of Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan.

In the period from January to May 2017, total Indonesian-Russian trade also increased amounting to 54.43 percent compared to the same period last year with a trade value of $1.12 billion. Indonesia surplus $77.45 million with export value of $599.97 million.

Diplomacy of Oil Palm

In addition, in particular, the Trade Mission to Russia is also done as an effort of oil diplomacy Indonesia sustainable palm oil. This effort has been started since President Joko Widod’s visit to Russia last year to boost sustainable palm oil exports.

“Indonesia’s growth strategy always takes into account the commitment of the Government of Indonesia to the environment. Indonesia clearly supports sustainable palm oil exports, “he said

He also stressed the need to increase the perception more positive towards
palm oil from Indonesia. This is so that importers and industries in Russia can be immediately gaining a more thorough understanding of industry developments  on Indonesia’s palm oil and potential cooperation with the Russian industry.

(Written by Linda Silaen, Email: linda.silaen@theinsiderstories.com)