Bumpy Ride in Spurring CPO Export to India

Indonesia’s hope to spur exports of palm oil and its derivatives are on edge, after the Indian vegetable oil association, The Solvent Extractors Association (SEA), is asking the Indian government to impose safeguards on crude palm oil (CPO) derivatives from Malaysia. This pressure arose because Malaysian CPO products flooded India following the reduction in import duties from 54 percent to 45 percent earlier this year.

The SEA protest is a threat to Indonesia, which didn’t have any trade pact with India. If Indonesia asks for import duties reduction when Malaysian palm oils are flooding Indian market, SEA would, of course, go all out against it. Indonesia expects that India would become a prominent alternative market when the country’s palm oil is subject to import duties by the European Union. To smooth out the expectation, the government has reduced the import duty of Indian raw sugar.