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| Date: 19 September 2011 - Author: Kompas | | The Association of Indonesian Oil Palm Enterprises (GAPKI) believed that the export of Indonesian crude palm oil (CPO)to Pakistan would soon be restored following a reduction in import duties under a Preferential Trade Agreement (PTA) between the two countries. | "This agreement has long been awaited by our CPO industry because Pakistan was a significant Indonesian CPO importing country. I believe that for some time ahead the CPO export market share to that country would soon increase," executive director of GAPKI M Fadhil Hassan said when contacted from Jakarta Saturday.
The CPO import duty cut by Pakistan, he said would increase the competitiveness of Indonesian CPO against Malaysia’s CPO which in the last three years already enjoyed a tax rate cut from Pakistan.
"Previously, there is a very big difference in import duty with Malaysia’s CPO. Under the agreement the difference became non-existent, and our CPO will enjoy the same treatment with Malaysia’s products," he said.
The application of the agreement, he said, will restore Indonesia’s CPO exports to Pakistan which had dropped substantially due to the strong competition posed by Malaysia’s CPO which enjoyed tax relief from Pakistan after the two countries reached a free trade cooperation agreement.
"But some time would still be needed to restore the CPO mart share there which was previously controlled by Malaysia. It is necessary for us to one again to penetrate the market and build a network with businesses there," he said.
He said he was optimistic that Indonesia’s exporters would soon be able to interact and build a network with the buyers from Pakistan, so that in the next two to three years the CPO exports to Pakistan would be gradually restored.
In 2007, before Malaysia’s CPO was given import duty cuts, he added, the value of Indonesia’s CPO exports to Pakistan reached 560 million US dollars.
"Pakistan and Indonesia are culturally and politically close to one another and I think it would not be too difficult to re-enter their market, the market penetration would be quicker," he said.
He added that even in the near future he will meet Pakistani businessmen while they are on a visit to Indonesia to discuss CPO business. |
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