MANILA — Agriculture Secretary Manny Piñol said government is seriously considering the possible tightening up on palm oil importations, particularly those coming from Indonesia, to prevent a flooding in the local market and at the same time address the trade gap between countries.
Piñol noted that Indonesia exports USD1 billion worth of agricultural products to the Philippines mainly palm oil while allowing only a measly USD50 million worth of exports from the Philippines.
As such, he said a team was sent to Indonesia in December to address the trade gap and also discuss the removal of import restrictions on Philippine horticultural and animal products. The restrictions imposed by Jakarta caused the “drastic” decline in the volume and value of shipments of agricultural products.
But, Piñol said it seems Indonesia “has no intention to open its market.”
Despite that, he said the Philippines will continue to pursue talks with them.
In fact, Piñol said, he might meet with the Indonesian ambassador within the week to discuss the issue.
The DA chief is also considering the imposition of a tariff on imported palm oil to avoid flooding in the local market to the detriment of local farmers.
“We could impose tariffs on these items so that we will be able to protect our local farmers and the local industry from further injury, and according to our WTO (World Trade Organization) negotiators, the Philippines could invoke a claim of injury on the industry,” he said.
Palm oil is one of the most widely-consumed vegetable oils around the world, with significant usage in food, cosmetic, hygiene products, biofuel, and a variety of other sectors. In recent years, Indonesia has been dominating the global palm oil industry with the world’s largest palm oil production and surging exports.
The palm oil industry in Indonesia is one of the fastest growing sectors over the last 20 years, mainly driven by increased global demand and higher yields.
According to recent data from Index Mundi, Indonesia produced 36 million tons of palm oil in 2016, accounting for over 62 percent of the world’s palm oil production in that year. Over 3.7 million people are currently employed in Indonesia’s palm oil industry.