RI Ready to Appeal against Russian Bans on CPO

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  • TEMPO.CO, Jakarta – Spokesperson for integrated palm oil producer PT Musim Mas, TogarSitanggang, said he would file an appeal with the World Trade Organization (WTO) in relation to Russia’s bans on Indonesian Crude Palm Oil (CPO). According to Togar, Russia’s complaints about the hydrogen peroxide content of Indonesian CPO was a form of technical barrier to trade.

    “The [ban] action is not right,” Togar told Tempo on Monday, September 8, 2014.

    According to Togar, Russia did not reject Indonesian CPO directly but its requiring Indonesia to have the content of hydrogen peroxide of its CPO at under 0.9 percent was impossible. Therefore, he added, Indonesia would file an appeal in October or early November 2014 to the WTO in Geneva.

    Togar assumed Russia made the decision in a bid to import CPO from other countries closer to it, such as the Netherlands, to cut back on costs. Togar said Russia was well-aware that it would be impossible for Indonesia to meet the requirements since the hydrogen peroxide content of the CPO had reached five percent and it would increase to 8-9 percent by the time it arrived in Russia.

    To minimize the impacts of the bans, Togar said, CPO producers were currently preparing to look for new buyers. He added CPO producers who were able to build CPO processing facilities overseas could optimize their production since the hydrogen peroxide content of their CPO would be lower. Togar predicted that the CPO bans would have negative impacts on the trade between Indonesia and Russia.