Indonesia Seeks to Boost Palm Oil Exports to Russia

Indonesia is seeking to increase its exports of palm oil to Russia, as there is a large opportunity to tap the country's market, a media reported here on Jun 6, 2012.

Deddy Saleh, director general for foreign trade at the Trade Ministry said that Indonesian officials had discussed the issue with their Russian counterparts during the recent APEC Food Security Ministerial Meeting in the Russian city of Kazan.

Currently Indonesia's exports of palm oil only tapped about 2 percent of the Russian palm oil market.

"We keep looking for new markets, including Russia, which has market potential [for crude palm oil or CPO] up to 2 millions tons, " the director was quoted by the Jakarta globe as saying.

Saleh said Indonesia might be able to export CPO directly, without the help of third parties, by sea to Vladivostok, a Russian city that hosts the country's largest port on the Pacific Ocean. It would then be distributed via railway networks.

The executive director of the Indonesian Palm Oil Association ( Gapki), Fadli Hasan, said Russia had been largely importing CPO from the Netherlands and Ukraine.

"But the palm oil actually comes from Indonesia and Malaysia. And there remains a perception that CPO is not healthy, but I'm sure demand for CPO will increase every year, especially because CPO prices are more competitive than those of other vegetable oils, " he said.

Last year, Indonesia exported 323,800 tons of palm oil, worth 357.8 million U.S. dollars to Russia, approximately 2 percent of Indonesia's total CPO exports. The figure is higher than the 250, 000 tons exported in 2010.

Indonesia produced 20 millions tons of CPO in 2011, 70 percent of which was exported, mainly to China, India and Western Europe. The Indonesian government aims to boost this year's CPO production to 25 millions tons and to increase its export volume to up to 18 millions tons.