The Diminishing Importance of European Union
JAKARTA – Council of Palm Oil Producing Countries (CPOPC) partnered with Indonesia leading newspaper, Kompas, organized a one-day seminar in mid May 2018 gathering Indonesia palm oil multi-stakeholders and European Commission to garner insights on recent European Union (EU) Renewable Energy Directive II. The seminar, entitled ‘’Addressing Trade Barriers of Palm Oil Export in Global Market’’, brought multi-perspectives on board, of the business, government, academician as well as civil society organization, and presented Coordinating Minister for Maritime Affairs of the Republic of Indonesia, H.E Luhut Binsar Pandjaitan as the keynote speaker.
The Minister underlined that Indonesia shall apply an offensive trade diplomacy against EU, as palm oil ban is discriminatory, while keeping room for fruitful dialogue. Indonesia is increasingly balancing out dependency to EU market by, among other, deepening and widening palm oil trade agreement with China.
CPOPC Executive Director, Mr Mahendra Siregar, suggested the diminishing importance of EU as Indonesia top palm oil export destination. Made up 75% of Indonesia palm oil export share in 1990, EU’s share remains only 14% last year (2017) and shall keep falling-off until taken over by China in 2025 as forecasted.
Palm oil demand in non-EU market has been soaring up to 30 times since 1990s while EU has been experiencing a slow pace increase of 6 times during the period. Emerging economies in the region of so-called ‘’Indo Pacific’’ such as India, China, and Pakistan are undergoing a sizable population and economic growth, while EU tends to be stagnant.
In the closing statement of the seminar, Mr Mahendra said that palm oil producers, Indonesia particularly, need to build an equal and straightforward communication with EU given that palm oil issue is now a global, common concern. Three decades ahead global vegetable oil demand shall upsurge to 400 million ton that necessitates land expansion of 200-300 million hectare of soy bean, compared to just 20 million hectare of palm oil, thanks to its high productivity. ‘’Palm oil is the only viable option,’’ told Mahendra. ‘’Otherwise, there shall never be sustainable way to meet the demand,’’ he added. (ed: CPOPC)
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