Indonesia needs to build support in the global market to tackle the negative sentiment in the European Union for its palm oil, an official from the Coordinating Ministry for Economic Affairs has said. “For me, it is about how we build the spirit from the inside, or build sympathy from the global market, on the fact that Indonesian palm oil has been managed in a sustainable manner,” deputy for food coordination and agribusiness coordination at the ministry, Musdhalifah Mahmud, said.
She made the remarks at a webinar on 'Indonesian Palm Oil's Future in the European Union Market Post COVID-19’ in Jakarta.
The livelihoods of 18 million Indonesian workers depend on the country's palm oil production, she pointed out. The industry can also pave the way for economic development in the rural areas of Indonesia, where the economy is still lagging the rest of the country, she added. Many regions in Indonesia, she noted, need their economies to be elevated, and they have yet to gain access to economic development, education, and health. One of the measures to empower them is developing palm oil products, she said. "Perhaps it can be done by initiating a tagline that describes our palm oil, it is not something glamorous or exclusive, rather, it is something that captures the need of our country for the people," she suggested. The EU remains an important and stable market for Indonesian palm oil exports till date, despite a downward trend in demand, she noted. Up until October, 2020, the European Union market absorbed 24 percent, worth US$1.40 billion, of the total exports of Indonesian crude palm oil (CPO). The total exports of Indonesian crude palm oil reached US$5.85 billion in October, 2020, despite the various obstacles imposed by the EU, Mahmud said. However, the Renewable Energy Directive (RED) II, allegations of subsidies, and dumping have had an impact on the export of palm biofuels, even though this has been compensated for by exports for food and industrial purposes, she observed. Aside from crude palm oil products, the European Union is also a market for Indonesia's palm oil core products and other palm products. Before 2020, exports of palm kernel crude oil to countries in the European Union accounted for 33.9 percent of the total exports of such products, or amounting to US$72 million. (INE)