KL better in tapping CHina's CPO market

KL better in tapping CHina's CPO market

Adianto P. Simamora, The Jakarta Post, Jakarta

Indonesia has failed to compete with Malaysia in penetrating
China's promising crude palm oil (CPO) market due to poor
marketing efforts, the Indonesian Palm Oil Producers Association
(Gapki) said on Wednesday.

Gapki's chairman Derom Bangun warned that Indonesia would lag
further behind Malaysia in the Chinese market, if local producers
did not immediately take actions to boost marketing efforts in
the world's most populous nation.

Derom said that unlike Malaysian producers, who are aware of
the importance of marketing efforts, Indonesian producers are
"production-minded" rather than "marketing-minded".

"Indonesia will face difficulties in increasing its CPO export
to China if local producers are unwilling to change their
production oriented thinking," Derom told The Jakarta Post in
Jakarta on Wednesday.

He urged local producers to spend more capital on promotion of
their CPO products abroad.

"The CPO market has been saturated, unlike several years ago.
So we have to be more active in promoting our products and taking
new potential markets," he said.

Describing the aggressive marketing campaign conducted by
Malaysia in China, Derom said Malaysia had two marketing
representative offices in China, one established by the
association of Malaysian palm oil producers and the other by the
Malaysian government.

"Indonesia, meanwhile, has nothing there. We are very
ineffective in marketing," he said.

Indonesia has only sent one trade delegation to China early
this month, consisting of CPO producers and government officials,
as part of marketing efforts in China, Derom said.

According to Derom, Malaysia expects to export 900,000 tons to
China this year, while Indonesia's exports are projected to reach
only 450,000 tons. Last year, Indonesia exported a total of
450,000 tons to China.

Indonesia is the second largest CPO producer in the world with
an annual output of 7.2 million tons, while Malaysia is the
largest with an annual output of 10.8 million tons.

"I have received information that China will raise its import
quota to 1.8 million tons of CPO in 2002, from 1.4 million tons
this year. The quota will be further raised to 2.2 million in
2003 and 2.6 million in 2004," he said.

Derom said during the trade mission to China, the Indonesian
delegation met with about 300 Chinese businessmen.

"They (Chinese businessmen) are actually very enthusiastic
about Indonesian CPO products but they voiced concerns about the
quality. That's why, we need to be more proactive," he said.