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Palm oil diplomacy for Indonesia's most valuable commodity
In monetary terms, the value of Indonesia’s palm oil exports in 2017 stood at US$22.97 billion, up from $18.22 billion in the previous year.
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Indonesian palm oil and its derivatives have been under the scrutiny of international environmentalists since the early 2000s. (JP/Dhoni Setiawan)
T
he palm oil sector plays an important role in the Indonesian economy. In monetary terms, the value of Indonesia’s palm oil exports in 2017 stood at US$22.97 billion, up from $18.22 billion in the previous year.
It also has a political significance, as it is the source of employment for approximately 17.5 million Indonesians. It directly employs 5.5 million workers and indirectly supports up to 12 million workers. It also serves as the engine of economic growth in rural areas, lifting millions of Indonesians out of poverty.
In 1982, small-scale farmers only accounted for 2 percent of Indonesian palm oil plantation owners, as of 2016 the number had increased to 41 percent. By 2030 they are expected to account for 60 percent. But Indonesia’s most valuable export commodity is currently under immense pressure from the proliferation of discriminatory trade policies against palm oil.
Following a petition filed in February 2017 by the United States National Biodiesel Association, an ad hoc coalition of associations consisting of the National Biodiesel Board and 15 companies, the US Department of Commerce launched an investigation into biofuels coming from Argentina and Indonesia, following an allegation that both countries sold their biodiesel below “normal value”.
