Indonesia's EU CPO Market in Danger as Malaysia Could Step In

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Petir Garda Bhwana

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  • Workers unload oil palm fruits in a state-owned crude palm oil processing unit in North Sumatra May 29, 2012.  REUTERS/Tarmizy Harva/File Photo

    Workers unload oil palm fruits in a state-owned crude palm oil processing unit in North Sumatra May 29, 2012. REUTERS/Tarmizy Harva/File Photo

    TEMPO.CO, Jakarta - The tariff barrier imposed by the European Union (EU) against CPO-based biodiesel products has only been enforced on the products that come from Indonesia, which can pose as a threat as Malaysia – which is also the largest CPO producer in the world – has yet been hampered by EU’s anti-subsidy imports.

    “The performance of our biodiesel exports could lose to Malaysia. Since they can fill in the gap we left. However, the EU has never bothered with Malaysia’s biodiesel because they have never exported their biodiesel to Europe,” said Indonesia Biofuel Producers’ Association (Aprobi) chairman Master P. Tumanggor on Tuesday.

    Tumanggor acknowledged that the biodiesel sold by Malaysia is pricier than those from Indonesia, which has made them safe from allegations related to subsidies. However, he said that Malaysia would likely face the same issue as Indonesia once their product reaches European shores.

    The association previously predicted that Indonesia would be able to export roughly around 432,000 tons of biodiesel to countries under the EU banner this year. However, this initial goal is likely to be corrected following the tariff barrier.

    In a separate location, Core economist Mohammad Faisal advised the Indonesian government to quickly save its CPO products sold to the EU market as Indonesia is facing a greater export performance pressure.

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