JAKARTA (TheInsiderStories) – Coordinating Minister for Maritime Affairs Luhut Binsar Pandjaitan said that there will be a temporary decision on palm oil ban from the European Union (EU) on June 27. The statement comes out after he met with the EU Ambassador to Indonesia Vincent Guerend on Friday (15/06).
Guerend confirmed that his conversation with Luhut was related to the palm oil ban. He, however, was reluctant to provide details regarding his conversation with the minister.
The EU had planned to apply a ban on the use of palm oil as a source of bio fuel in Europe by 2021. The organization was banned Indonesian palm oil in order to prevent deforestation and meet their ambitious climate goals.
Responding on the policy, Indonesia’s governments threatened to fight back against EU in palm oil ban by cutting imports from the region. Indonesia previously decides a defensive strategy to solve this issue by explaining the eco-friendly condition of palm oil plantation in this country.
But now, one of the world’s biggest palm oil producer decides to use an offensive strategy to handle this issue. Minister of Trade Enggartiasto Lukita said the offensive policy to handle this issue already approved by the Vice President Jusuf Kalla.
Furthermore, Indonesia will consolidate with the Malaysia’s Governments to take a step against palm oil ban by EU. The government will delegate the ambassador for Malaysia to discuss this issue further.
The palm oil ban potentially harm Indonesia and Malaysia’s economy since the both are the biggest palm oil exporters in the world. For the both countries, the EU is the second biggest palm oil importer after India.
Last year, Indonesian exported a total of 28 million tonnes of crude palm oil (CPO), valued US$23 billion, contributed to 12 percent of the country’s export. While Malaysia produced around 19.5 million tonnes last year with an export value of $25 billion.
The same reactions comes from the other biggest palm oil producer Malaysia. Plantation Industry and Commodities Minister Datuk Seri Mah Siew Keong last March said the ban will disturb the EU-Malaysia free trade agreement negotiation.
The Malaysia’s government viewed the palm oil ban as a discrimination against the poor people in Malaysia and Indonesia. He explained palm oil ban will hit the livelihoods of more than 650,000 smallholders living in rural Malaysia.