Ministry of Trade: Be Aware of the Decreasing Export for the Last Three Years – The Strategic Policies Are Published

Ministry of Trade: Be Aware of the Decreasing Export for the Last Three Years – The Strategic Policies Are Published

InfoSAWIT, JAKARTA – General Director of National Export Development, Ministry of Trade, Dr. Kasan told that crude palm oil and its derivative play the important role to the non-oil and gas exports, for example, in January – May 2020, they reached US$ 7,6 billion and contributed 12,5%. The export values increased from the previous year.

But the export markets decreased in 2017 - 2019. “We need to be aware of the decreasing export markets in the last three years,” he said.

The CPO and its derivative monthly exports in total from Indonesia also decreased since the corona virus (Covid-19) hits and have occurred since the early of January 2020. These drastically decreased compared to December 2019.

He also mentioned that the exports from Indonesia in 2019 reached US$ 15,98 billion, or about 53,5% to many countries in the world but the values decreased 12,32% compared to the same period in last year; the export trend in 2015-2019 decreased 0,04%.

Ministry of Trade informed that there were 5 export countries to purchase CPO from Indonesia, such as, China within the values about US$ 3,1 billion, India reaching US$ 2,3 billion, Pakistan reaching US$ 1,17 billion, Malaysia reaching US$ 820,9 million, and Bangladesh reaching US$ 710,8 million.

The main export of the CPO is RBD Palm Olein and still gets pressed. The export of RBD Palm Olein really decreased in January – May 2020 compared to the same period in last year, namely in the volume reaching 28,1%, or decreased from 4,92 million tons to be 3,54 million tons. “The values of RBD PO decreased 10,4% or from US$ 2,64 billion to be US$ 2,37 billion,” he said in the webinar done by Forum Jurnalis Sawit (FJS), within the theme “Mendongkrak Pasar Domestik dan Ekspor Minyak Sawit Indonesia”, Wednesday (22/7/2020) which InfoSAWIT did join.

The CPO export in January –May 2020 increase both in the volume and the values. The CPO export volume significantly increased 48,5%, or from US$ 1,29 billion to be US$ 1,93 billion. The CPO export volume increased 9,9% or from 2,72 million tons to be 2,99 million tons.

But the palm oil trade barriers from Indonesia keep raising, for example, the policy about Renewable Energy Directive (RED) II from European Union Parliament to palm oil biodiesel product.

European Union also regulated the materials of 3MCPD and GE in the food stuffs, due diligence palm oil from United Kingdom; the tax incentive elimination for palm oil biodiesel products by French; anti-subsidy by European Union Authority, anti-dumping and subsidy by the United States of America, and negative campaigns in European Union.

To solve the trade barriers which eventually bother the palm oil exports from Indonesia, he continued, the government of Indonesia tried to publish the CPO price stabilization policy and increase the domestic palm oil demands, for example, by implementing the biodiesel mixture 30 percent to diesel or known as B30. The policy runs since the early of 2020 as the strategic way to fulfill the energy in Indonesia from the renewable energy source. It is estimated in 2020 the biodiesel distribution volume would be approximately 8 million kiloliters.

He also told that B30 could be the effective way to increase the derivative product demands namely FAME in our country. The constant supply could maintain the palm oil price stable. “The government has allocated the Budget and Crude palm oil Supporting Fund (CSF) that Palm oil Plantation Fund Management Agency (PFMA) manages to give the B30 incentive,” he said.

The other policy is Tax Levy. The publication of Regulation of Minister of Finance No. 57 / 2020 since 1 June 2020 supports the increasing CSF about US$ 5 and eliminates the threshold. “The CSF would maintain the downstream industries in our country,” he said.

The combined policies of CSF and Out Fee Policy could be giving incentive to enliven the downstream industries in the domestic. The graphic managed by ministry of trade revealed that the Out Fee policy in 2010 and the CSF in 2015 were positively correlated within the increasing volume of the derivative products in Indonesia (downstream proxy).

The higher CSF would be, the derivative export volumes would be too to increase the incentive in the domestic. “While the CPO and CPKO tend to decrease,” he said. (T2)


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