RI to lobby India to cut CPO import tariff: Minister

RI to lobby India to cut CPO import tariff: Minister

Zakki P. Hakim, The Jakarta Post, Jakarta

Minister of Agriculture Anton Apriyantono will leave for India
this week to try to convince his Indian counterpart to revoke the
latter's decision to raise crude palm oil (CPO) import duty to 80
percent.

Indonesia would ask India, the country's second largest CPO
importer after China, to maintain the rate of 65 percent, Anton
said, adding that Indonesia would be ready to offer incentives
for India in return.

"We are ready to offer India the opportunity to export sugar
to us in return for lowering the import duty," Anton told
reporters after a meeting with the minister of trade and local
associations.

Anton said that India had always had great interest in
exporting its agricultural products, in particular meat and milk,
aside from sugar, to Indonesia, although he ruled out the
possibility of importing India's meat and milk, as India was not
free of foot and mouth disease.

"But we can buy their sugar. We are a very strong buyer," he
said, adding that the meeting would be held on the sidelines of
ministerial talks, slated for April 17 to April 19 in New Delhi.

This year, Indonesia has set a quota to import 500,000 tons of
sugar, up from last year planned quota of 400,000 tons. However,
last year's actual import only reached 200,000 tons, mostly from
Thailand.

G20 is a group of developing nations promoting its interests
in agricultural negotiations in the World Trade Organization
(WTO).

The Indian government recently hiked CPO import duty from 65
to 80 percent to provide protection to its farmers who make a
living by growing soybean, a major vegetable oil commonly used as
a substitute to palm oil.

The move is not against WTO rulings with India having secured
a commitment allowing it to set a ceiling tariff for certain
products of up to 300 percent. The commitment allows India to set
its CPO import duty anywhere between zero and 300 percent.

"Later on, we will also negotiate in the WTO for India to
reduce the 300 percent commitment," Anton said.

He said that Indonesia had yet to talk with Malaysia to
jointly lobby India on the issue, but should the meeting fail to
come up with a productive result, such a possibility would not be
ruled out.

After Malaysia, Indonesia is the world's second largest
exporter of palm oil -- a raw material for, among other things,
cooking oil, soap and detergent.

Output from the two countries is expected to make up about 85
percent of this year's global palm oil production.

India's decision is feared to hamper Indonesia's target to up
its export to India.

Earlier, Indonesian Palm Oil Producers Association (Gapki)
chairman Derom Bangun said the association expected to increase
CPO exports to India to 1.2 million tons this year from last
year's 960,000 tons.

Indonesia total exports, meanwhile, were projected to reach
7.8 million tons, up from last year's estimated 7 million tons.

China and India are Indonesia's main CPO markets. Indonesia
also exports to Pakistan, Bangladesh, the Netherlands and to new
markets such as eastern Europe.

The country is expected to produce 11.6 million tons of palm
oil this year, compared to last year's estimated 10.8 million
tons.

Elsewhere, Anton also said that beside crude palm oil import
duty, the negotiation would also include Indonesia's request for
India to ease its health-related export requirements for olein, a
crude palm derivative.