No cancellation of CPO exports to US yet, association says

Jumat, 03 Februari 2012 | 07:38

Palm oil exporters said that there has been no cancellation of palm oil exports to the US, despite the buyer\'s review results that show biofuel from this commodity can only cut greenhouse gases by 11%-17%, far below minimum requirement of 20%.Indonesian Palm Oil Association's (Gapki) Head of Marketing Susanto said there is yet to be any cancellation of orders from palm oil importers in the US. “The decision is not effective yet,” he said to Bisnis yesterday.

Exports of CPO and its derivative products to US reached 276,000 tons in 2009 and dropped to 172,000 tons in 2010 and 80,000 tons in 2011.

“Our export [of crude palm oil] to US is not large,” he said.

However, the US decision will heavily impacted the domestic palm oil industry, he said. Therefore, Indonesia should provide accurate data and facts about oil palm development.

Indonesia needs to explain to the US that the current development of palm oil is different from the style in 1980-1990s, which was conducted through forest clearing, Susanto said.

Gapki doesn't see Indonesia expanding oil palm plantation using the same pattern in the 1980s. Oil palm plantations are developed on degraded lands, not on natural and primary forests, he said. “It’s also not in peatlands.”

Deputy Minister of Trade Bayu Krisnamurthi said that the effect of greenhouse gases can be reduced by the use of palm oil-based biofuel.

The US expects to mix its fossil fuel with 7.5 billion gallons of biofuels by 2012. Biofuels used in this program must be able to cut greenhouse gases emissions by at least 20%. According to the US' calculations, Indonesia's CPO can only reduce emissions by 11%-17%. “That [11%-17%] is their [US] claim.”

Indonesia must show the US that palm oil-based biofuel can cut greenhouse gases by 40%-46%, much larger than their claim, said Krisnamurthi.

There was a miscalculation as the US considered all palm plantations in Indonesia to be located on natural forests, Krisnamurthi said. Some are actually on plantations and neglected production forest.

Palm oil productivity

The US, he continued, sees the palm as a tree that grow stagnant for 30 years. In fact, the oil productivity rises in that period.

“The US doesn’t take into account the sustainable palm oil plantation management practices that have been implemented in Indonesia. We think their claim can be negotiated."

Indonesia is able to handle the black campaign on palm oil and the government will do so, he said.

Ministry of Agriculture, Ministry of Commerce, and Ministry of Environment will submit their views related to the US' notification, Krisnamurthi said.

The government also urges business players, farmers, and stakeholders to submit their views on palm oil, which has become open to public scrutiny, by February 27, 2012.

Palm oil exports to the US is less than 100,000 tons each year, lower than Malaysia.

Ministry of Agriculture plans to report this issue to the World Trade Organization (WTO), if it’s proven that Indonesia’s palm oil is being sidelined. (t06/msw)

By Sepudin Zuhri