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Indonesia joins forces with other producers to fight anti-palm oil campaign

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A farm worker gathers oil palm fruit bunches at a plantation in Lampung. The Jakarta Post/ANN

Indonesia joins forces with other producers to fight anti-palm oil campaign

Palm oil-producing countries Indonesia, Malaysia, Brazil, Honduras, Nigeria, and Thailand have agreed to cooperate in facing the growing campaign against palm oil and to promote sustainability of palm oil production to increase exports of the commodity.

The agreement was made during a ministerial meeting of the Council of Palm Oil Producing Countries (CPOPC) in Kuala Lumpur on Tuesday.

Malaysian Prime Minister Mahathir Mohamad said in his address at International Palm Oil Congress and Exhibition that Malaysia and other producing countries should not hesitate to take countermeasures if importing countries decided to impose discriminatory trade barriers.

“If there is any evidence that such discriminatory trade practices are in violation of any international laws, Malaysia and other producing countries under the CPOPC must seek intervention from the WTO,” he said.

Mahathir said Malaysia and other palm oil-producing nations were stepping up efforts to disseminate accurate information about sustainable oil palm plantations and to counter false allegations concerning palm oil with conclusive facts, including the superiority of palm oil crops, which required less land than other vegetable oil crops.

Mahathir said the palm oil industry had to adopt the latest technologies to remain competitive. “New technologies that are incorporated into the entire value chain should be the catalyst for modernisation of the whole industry, making it more productive and efficient,” said the prime minister in Kuala Lumpur on Tuesday.

“It is important for the industry to capitalise on the technological pillars of the Fourth Industrial Revolution, which not only enhance operational efficiency but also result in sustainable development,” said Mahathir, adding that the use of technology had “reduced labour input and improved productivity”.

Malaysia will continue to push for sustainable palm oil and help smallholders achieve sustainability certification, the prime minister said at the ministerial meeting.

Meanwhile, speaking at a press briefing after the ministerial meeting held by the Council of Palm Oil Producing Countries (CPOPC) also in Kuala Lumpur, on Monday, Malaysian Primary Industries Minister Teresa Kok called for palm oil-producing countries to strengthen collaboration to address emerging issues in the industry, such as import restrictions imposed by the EU, and to promote biofuel consumption.

Kok said the meeting recommended several follow-up actions, such as continuing to fight restrictive measures against palm oil through the World Trade Organisation (WTO) and encouraging other palm oil-producing countries to join the CPOPC.

As of now, only Indonesia and Malaysia are members of the council, while several other countries are in the pipeline to become members of CPOPC.

Palm oil faces growing restrictions overseas, such as in Europe, which decided in March to completely phase out the use of palm oil-based biofuel by 2030. The EU considers palm oil a high-risk vegetable oil due to deforestation.

According to leaked documents, recently published by Palm Oil Monitor, the EU plans to exclude biofuels derived from palm oil by 2021. The EU has since declined to comment on the leaked information while the Indonesian government is considering reviewing a chapter on trade and sustainability on the Indonesia-EU Comprehensive Economic Partnership Agreement (IEU-CEPA).

The European Commission also slapped temporary duties of eight to 18 per cent in September on the import of biodiesel over allegations that palm oil companies received various incentives and special subsidies from the government.

Meanwhile, Coordinating Economic Minister Airlangga Hartarto said Indonesia would enhance a campaign to promote the sustainability of palm oil, adding that he would “expedite efforts to revitalise and replant oil palm” to avoid clearing more land.

“We are ready to spend [money] on the campaign to promote palm oil,” Airlangga said during the press briefing, without specifying how much the government would pay.

Airlangga also said he would hold a meeting with the Agriculture Minister to improve the oil palm replanting programme with new schemes and incentives.

Palm oil consumption, meanwhile, has more than doubled from seven million tonnes in 2015 and is likely to reach 15 million tonnes this year, according to market intelligence firm Oil World.

UK-based LMC International chairman James Fry said the country’s B30 mandate and weak production would reduce palm oil stockpiles and tighten the market by June next year.

The decline in reserves “makes it inevitable that the palm oil market will get tighter and the premium of CPO [crude palm oil] over Brent crude oil increases to a point where some palm oil demand switches to other oils, which will become more competitive against CPO,” he said recently.



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