Global Trade Threats Increase, Indonesian Palm Oil Diplomacy Must Be More Aggressive

Photo: Special

JAKARTA - Indonesia needs to strengthen palm oil diplomacy as part of a strategy to maintain the competitiveness of national commodities amid increasing global trade barriers.

Executive Director of the Palm Oil Agribusiness Strategic Policy Institute (PASPI), Tungkot Sipayung, said that palm oil diplomacy efforts need to use a proactive approach. He emphasized that palm oil diplomacy is ideally not reactive but can serve as a market intelligence instrument (market intelligence) that anticipates potential obstacles since the policy formulation stage.

Tungkot Sipayung explained that the success of palm oil diplomacy is not only measured by the ability to resolve trade disputes but also by effectiveness in preventing the emergence of policies that can harm the interests of the national palm oil industry.

"The good palm oil diplomacy should be if we succeed in moderating or preventing the emergence of other countries' policies that are detrimental to the national palm oil industry. Therefore, palm oil diplomacy should work as market intelligence," he said in Jakarta.

Tungkot admitted that the diplomatic efforts made by the Indonesian government over the past few years have shown positive results, especially through the diversification of the palm oil export market. This strategy has succeeded in reducing Indonesia's dependence on traditional markets, especially the European Union region.

Currently, Indonesian palm oil exports have spread to various regions in the world, including India, China, Pakistan, Bangladesh, countries in Africa, the European Union, and North America.

"The share of the European Union as our export destination is only 8-10 percent. So by diversifying the export destination countries, we are no longer dependent on the European Union market," he said.

On the other hand, the government through the Plantation Fund Management Agency (BPDP) continues to strengthen palm oil diplomacy at the international level through various programs involving the government, industry players, academics, and other stakeholders.

Various initiatives are carried out through strengthening relations with major importing countries, participation in trade missions to expand export markets, litigation and advocacy against policies that discriminate against palm oil products, positive campaigns through international media, and support for the organization of various palm oil forums and conferences on a global scale.

Meanwhile, the Head of the South East Asia Food and Agriculture Science & Technology (SEAFAST) Center of IPB University, Puspo Edi Giriwono, assessed that palm diplomacy is still a strategic need for the national palm oil industry because various forms of trade barriers continue to emerge in a number of countries.

He gave an example of the implementation of sustainability standards in several countries which are often discriminatory against palm oil commodities when compared to other vegetable oils.

"For example, why should only palm oil be sustainable, should there be no deforestation, can it only enter the European market? If you think about it, for example, soybean oil is produced by Brazil and they are still doing deforestation. But, it is not enforced (the rule)," he said.

However, Puspo Edi emphasized that strengthening international diplomacy must go hand in hand with improving the governance of the palm oil industry in the country.

According to him, competitiveness will be stronger if supported by production practices that meet the principles of sustainability, ranging from environmental to social aspects.

He assessed that improving governance, production processes, and product quality are important factors in increasing international market confidence in Indonesian palm oil products.

"We will improve the process and production in our country so that we can produce quality products, increase competitiveness, and so on," he concluded.