Indonesia Hopes to Boost CPO Exports to Pakistan
Kamis, 09 Februari 2012 | 10:14
Indonesia, the worldâ€™s largest crude palm oil producer, hopes it will boost its annual exports of palm oil to Pakistan to over $550 billion in the coming years after both nations signed a preferential trade agreement last week.The value of Indonesiaâ€™s palm oil exports to Pakistan had once been $550 million per annum, though it fell by nearly 75 percent to below $100 million after Malaysia, the worldâ€™s second largest producer, concluded a PTA with Pakistan.
With the PTA, Malaysiaâ€™s palm oil exports to Pakistan enjoyed import duty tariff reductions that have boosted exports to that country, while Indonesiaâ€™s CPO faced high import duties, causing the Indonesian commodity to face difficulties in competing.
â€œI hope Indonesia will regain the value of its past exports of about $500 million. This means that we will be able to increase our total exports to Pakistan to $1.5 billion or $1.6 billion.
â€œIndonesiaâ€™s total exports to Pakistan now account for about $1 billion,â€ Trade and Industry Minister Gita Wirjawan was quoted as saying by detikFinance following the signing of the PTA on Friday last week.
The success by the trade minister in concluding the long-awaited PTA was hailed by the House of Representatives Commission VI on trade and industry affairs.
In a hearing on Tuesday with Minister Gita Wirjawan, who is also chairman of the Capital Investment Coordinating Board (BKPM), Commission VI chairman Erik Satrya Wardhana expressed his appreciation over the signing of the PTA.
He said that Indonesia had proposed the PTA three years ago during the era of the previous trade minister. He noted that due to the delay in signing the PTA, Indonesia lost about $700 million per year for three years.
Indonesia, whose annual CPO production is estimated at 23 million tons, lobbied Pakistan for the past three years. The PTA negotiations between Indonesia and Pakistan were then delayed because there was a change of government in Pakistan.