Sunday 1 November 2009

Free trade agreement hurting CPO exporters

Crude palm oil producers are urging the government to speed up free-trade agreement negotiations with pakistan as malaysia,which already has a free-trade deal with the south asian nation,gains market share. ongoing talks between indonesia and pakistan started in early 2008 and were originally rxpected to take one year.malaysia's trade deal with pakistan took effect on jan 1 2008, and it's cpo exporters enjoy an advantages as they pay a 5 percent tariff in pakistan,compared with the 15 percent paid by indonesian producers.

CPO exporters are waiting the FTA with pakistan as the agreement will make our commodities more competitive.especially compared to those from our strong competitor malaysia,said derom bangun,chairman of the indonesian palm oil board.he said that indonesian CPO exporters had visited pakistan and met with the prime minister and business leaders there in june. "we are expecting to follow malaysia wich already enjoy a preferential tariff on its CPO exports to pakistan,"he said.

national CPO exports to pakistan are forecast to reach just 200.000 tons this year,down from 730.000 tons in 2007.malaysia's tariff advantage and stricter quality control standards in pakistan are two major reasons for the drop,bangun said

as well as indonesia CPO exports,the planned FTA will reduce indonesian tariffs on kino oranges imported from pakistan.the indonesian chamber of commerce and industry has also released a report showing potential of indonesia pulp and paper exports to pakistan.however currewntly pulp and paper exports are not part of the negotiations

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