The Indonesian Palm Oil Association (GAPKI) sees a gradual growth in crude palm oil (CPO) exports starting next year driven by an anticipated global economic recovery - Photo: Privacy

JAKARTA (TheInsiderStories) – Indonesia’s Crude Palm Oil (CPO) and its derivative products export declined 2 percent in the first half of this year to 15.30 million tons, as demand dropped amid import tariffs, the Indonesian Palm Oil Producers Association (IPOPA) reported.

According to the association, the downshift on the country’s CPO’s export was largely attributed to the decline of shipment to India and European Union (EU). Several factors affect the performance of Indonesian export is the presence of some of the trade barriers imposed by some countries.

The imposition of import tariff by India, and campaign on deforestation issues and scraping of policy in usage of food-based biofuel by the EU have nudged and hemmed in the shipment of the CPO and its derivative products to the nations, IPOPA said.

While, the United States (U.S) launched accusations of anti-dumping biodiesel and China tighten oversight imported vegetable oils. The stagnation was also influenced by Indian’s government policy who has raised import duties of vegetable oil in early March to 54 percent from 30 percent and 40 percent.

Followed the current condition, IPOPA expect the Indonesian government to start giving special attention to the palm oil industry to keep CPO prices not continue to slide amid the escalation of trade war between United States and China. Furthermore, the association said, the government need to create policies to boost domestic consumption by promoting to use biodiesel to non-PSO.

Another thing that government could do, said IPOPA, is begin to explore the African market still has great potential. It said: “The government could make policies such as lowering tariffs bottled cooking oil exports to African countries.”

Meanwhile Indonesia’s trade ministry has decided to postpone the application of rules requiring coal and crude palm oil export shipments to use Indonesian insurance for six months. The decision is the second time the rules, issued in October and due to come into effect on Aug. 1, have been postponed.

The rules were part of trade regulations issued in October that were intended to boost the role of the archipelago’s shipping industry and save foreign currency, part of which were postponed to 2020.