Wednesday, December 6, 2023

CPO Producers Indonesia and Malaysia in Talks with India Amid EU Market Restrictions

Faisal Maliki Baskoro
September 27, 2023 | 2:35 pm
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Aerial photo of palm oil-laden trucks queuing to enter the Permata Bunda plant in Pematang Panggang, Mesuji, Ogan Komering Ilir, South Sumatra, on Monday, July 17, 2023. (Antara Photo/Budi Candra Setya)
Aerial photo of palm oil-laden trucks queuing to enter the Permata Bunda plant in Pematang Panggang, Mesuji, Ogan Komering Ilir, South Sumatra, on Monday, July 17, 2023. (Antara Photo/Budi Candra Setya)

Mumbai. Representatives from the world's largest crude palm oil (CPO) producers, Indonesia and Malaysia, were in India on Wednesday to attend a related conference and seek opportunities to enhance market access. This move comes as sales to the European Union have been hindered by the Deforestation Regulation.

Indonesia and Malaysia, both prominent CPO-producing countries, are the founding members of the intergovernmental organization Council of Palm Oil Producing Countries (CPOPC). Recently, they welcomed Papua New Guinea as a new member and are awaiting the accession of Honduras as the fourth member.

The purpose of the visit to India is to convince the world's largest CPO importer that products from Indonesia and Malaysia adhere to sustainable production practices and to dispel negative stereotypes associated with palm plantations in both countries, CPOPC Secretary-General Rizal Affandi Lukman said in Mumbai.

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During the Sustainable Vegetable Oil Conference held later in the day in the Indian city, the CPOPC aimed to convey the message that Indonesia and Malaysia have long adhered to global standards for sustainable palm oil, he added.

Rizal also highlighted concerns about the EU's Deforestation Regulation, the ongoing conflict between Russia and Ukraine, and the rising demand for biofuel, suggesting that these factors could pose a threat to global food security.

Nageeb Wahab, a CPOPC executive from Malaysia, noted that India has taken a neutral stance in the dispute between the EU and CPO producers. However, he expressed concerns that India might be influenced by the EU in the future.

"India remains our largest buyer, but the negative perception toward the CPO industry is growing," Nageeb said.

Last year, India imported 5 million tons of CPO from Indonesia. However, it recently initiated steps to expand its own palm plantations after the Indonesian government briefly halted exports due to a shortage of domestic cooking oil supplies.

"India is currently looking to expand its palm plantation for strategic reasons, aiming to secure its domestic reserves in case of unforeseen events," Nageeb said.

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