Pakistan to Lower Indonesian Palm-Oil Tariff

According to Pakistan's The News International September 18, Zafar Mahmood, Secretary of Pakistan's Ministry of Commerce, recently visited Djakarta, the capital of Indonesia, to negotiate with Indonesia's trade department on a Preferential Trade Agreement (PTA). The two parties finally agreed to sign the PTA, which will take effect from January 1, 2012.

According to the Agreement, both parties will mutually give the tariff reduction and exemption on over 500 commodities. Therein, Pakistan will lower import tariff by 15% on Indonesia's crude palm oil and by-products of palm oil, and Indonesia will take zero-tariff measure on orange (kinno) imports from Pakistan.

With the new tariff measures, the market share of Indonesian palm oil will be equal to that of Malaysian palm oil in Pakistan.

In 2007, Pakistan lowered tariff on Malaysian palm oil, which caused the share of Indonesian oil to drop from 55% to current 5%.

Indonesian and Malaysian palm oils account for 80% of the global volume.