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Indonesia's palm oil exports to India losing out to Malaysia

Palm oil exports to India fell 13 percent to 6.7 million tons in 2018 from 7.6 million tons in 2017

Riyadi Suparno (The Jakarta Post)
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Mon, July 1, 2019 Published on Jul. 1, 2019 Published on 2019-07-01T14:49:04+07:00

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Palm oil exports to India fell 13 percent to 6.7 million tons in 2018 from 7.6 million tons in 2017 despite the increase in the country’s total palm oil export volume during the year. Palm oil exports to India fell 13 percent to 6.7 million tons in 2018 from 7.6 million tons in 2017 despite the increase in the country’s total palm oil export volume during the year. (Shutterstock/File)

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ndonesia’s palm oil export volume has increased in the past two years, but exports to its biggest market, India, has been decreasing as it loses out to competition from Malaysia.

Association of Palm Oil Producers (GAPKI) chairman Joko Supriyono said Indonesia needed to protect its market in India as it imports 20 percent of Indonesia’s palm oil.

Indonesia is losing out to Malaysia because Malaysia enjoys lower tariffs.

“As the issue is to do with tariffs, the industry cannot do anything. The government has to wake up and do something both for the short- and long-term. India is an important market and we have to protect our interests there,” Joko told The Jakarta Post on Sunday.

According to GAPKI data, Indonesia’s palm oil export volume increased slightly to 32 million tons in 2018 from 31 million tons in 2017, while palm oil exports to India fell 13 percent to 6.7 million tons in 2018 from 7.6 million tons in 2017.

GAPKI data also shows palm oil exports to India were down 12 percent in the first five months of this year to 1.8 million tons from 2 million tons in the same period last year, while total palm oil exports in the same period increased to 13.1 million tons from 11.9 million tons.

The crux of the problem is the punitive tariffs imposed by India. India has gradually increased tariffs on Indonesia’s crude palm oil from 2.5 percent in 2013 to 44 percent now and refined palm oil from 7.5 percent in 2013 to 54 percent now.

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