The Diplomacy of Palm Oil Trade in India

The Diplomacy of Palm Oil Trade in India

InfoSAWIT, JAKARTA – Palm oil trade between India and Indonesia actually runs fast in the last two decades. India is very potential for Indonesia to trade palm oil but it has its challenges.

It needs solutions to solve the challenges, such as, by making communication, meeting by visiting, and negotiation. There should be cooperation to get the solution.

The writer also wanted to describe the challenges and the solutions from the old day cooperation.

In 1988 for the first time the writer visited India together with the team to promote the investment and trade. It was led by Chief of Badan Koordinasi Penanaman Modal (BKPM), Sanyoto at the time.

In the meeting, the negotiation team found that India did not import palm oil at all. The country fulfilled its vegetable oil needs from other kinds.

The writer thought, that was the reason why Indonesia and Malaysia did not pay attention when World Trade Organization (WTO) discussed the import tariff to India. We suddenly surprised, palm oil import tariff reached 300% while soybean import tariff was 45%.

One day when the government of India run 60% import tariff for palm oil from Indonesia, the writer had a chance to visit one palm oil factory in India.

The production cost to palm oil in the factory nearly reached US$ 600 per ton while the palm oil import from Indonesia was about US$ 400 per ton. This was the reason why the factory could not compete with palm oil import from Indonesia.. (Chairman of Indonesian Palm Oil Board, (IPOB), Derom Bangun)


For more, please read InfoSAWIT January, 2019


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