CPO smuggling rife again: Hasan

JAKARTA (JP): Concerns about the smuggling of crude palm oil (CPO) out of the country have arisen again amid the government's decision to maintain the export ban which was originally due to be lifted on April 1.

Minister of Industry and Trade Mohamad "Bob" Hasan said Tuesday his office would thoroughly investigate the alleged export of 100,000 tons of CPO and its derivatives in the first quarter and would act firmly against smugglers.

The Jakarta Post obtained yesterday a copy of a document sent by Wilmar Pte.Ltd in Singapore to PT Samudra Indonesia, the agent for MT Courage Venpure, booking cargo space for 1,050 tons of refined bleached deodorized (RBD) palm oil and 1,000 tons of RMD olein to be loaded at the Riau port of Dumai.

Both commodities are still banned from being exported.

Trading sources say MT Courage Venpure is scheduled to arrive at Dumai on April 7 or April 8 and allege that Wilmar's CPO imports would be supplied by PT Bukit Kapur Reksa, a major COP producer in Riau, in which Wilmar is a major shareholder.

However, a Bukit Kapur Reksa executive in Dumai, denied yesterday that his company had sold RBD palm oil and olein to Wilmar, saying Wilmar could have ordered it from other producers.

Newspaper reports early this week said that at least 100,000 tons of Indonesian crude palm oil had arrived in Rotterdam since January despite the ban.

The Neraca daily quoted sources at the agriculture ministry as saying the exporters were big producers.

"We will check whether it is true that there have been illegal exports. We cannot tolerate this if it is true," Hasan said.

Indonesia banned the export of crude palm oil indefinitely in January to stabilize domestic prices, which had soared because of the tumbling rupiah.

Producers in North Sumatra, the country's largest CPO producing area, alleged early in January that PT Bukit Kapur Reksa had succeeded in exporting 33,000 tons of CPO and its derivatives on Jan. 7 and 3,000 tons of RBD palm kernel oil on Jan. 27, all through the Dumai port.

The Riau customs and trade offices denied the allegations but one of the producers produced a copy of the final cargo manifest of the MV Fertility of Jan. 7 and shipping documents for freight space at MT Stolt Guardian to support the allegation.

Trade sources were quoted by Reuters as saying Wednesday that talk of illegal crude palm oil exports to Europe had been in the market for some time.

"Rumors about the smuggling have been around in the market for the past three months. What I know is that the illegal exports have been done from Sumatra," said one source.

"The palm oil may be kept in drums labeled coconut oil," the source told Reuters

Separately, the secretary general of the industry and trade ministry, Aidil Juzar, said in Jakarta the export smuggling of crude palm would continue so long as there is a wide disparity between its domestic and international prices.

CPO at present sells for US$ 600 per ton in the world market and only $250 per ton in the domestic market.

"Smuggling is like a natural law. If there is a disparity in the prices of a commodity in the domestic and foreign markets, smuggling will continue," Juzar, was quoted by Antara as saying on Wednesday.

Traders in London were quoted by Reuters as saying that they did not rule out the possibility of Indonesian crude palm oil being smuggled to other destinations.

Nafis Daulay, chairman of the Association of Indonesian Edible Oil Industries, said the organization had again asked the government to lift the ban in line with economic reforms prescribed by the International Monetary Fund.

"We want the government to lift the ban because of our total production of nearly six million tons, only 3.5 million tons are needed by the local market," he said.

"We need dollars, so what's wrong with lifting the ban," he added.

Trade sources said palm oil production for 1998 was expected to reach 5.90 million tons, down from a previous forecast of 6.30 million tons. (vin)