Indonesia Continues Quest to Put Palm Oil and Rubber on APEC EG List
The government of Indonesia will be firm to convince the international community at the Asia- Pacific Economic Cooperation (APEC) forum to place crude palm oil (CPO) - including its derivative products - and rubber on the APEC Environmental Goods List (EG List). In the APEC ministerial meeting in Surabaya (East Java), last April, Indonesia failed to include these products on the list. However, the government will continue its lobby during the current APEC meeting by stressing that these products are environmentally friendly.
The Eurozone and United States have been conducting anti-palm oil campaigns in recent years, which have negatively impacted Indonesian exports of crude palm oil. Criticism is particularly directed at the expansion of palm oil plantations through illegal logging. The Indonesian government, however, asserts that the domestic palm oil and rubber industries are now pro-sustainable development.
The APEC Environmental Goods List contains 54 items that are labeled environmentally friendly (for example solar panels or energy saving lamps). The advantage of being listed is that import duties on these products fall by 5 percent.
The palm oil industry is one of the most important industries of Indonesia as it contributes a significant portion to the country's foreign exchange earnings and provides employment to four million Indonesians. Earnings in Indonesia's plantation sector are dominated by palm oil, which accounts for 24 percent of total non oil & gas exports and 19 percent of total Indonesian exports. As such, it forms an important pillar of the Indonesian economy.
Global palm oil production is dominated by Indonesia and Malaysia. These two countries together account for around 85 to 90 percent of total global palm oil production. Indonesia is currently the largest producer and exporter of palm oil worldwide.
Indonesia is the world's second-largest producer of rubber (after Thailand). Since the 1980's, the Indonesian rubber industry has shown a steady increase in production rates. Most of the country's rubber production - around 80 percent - is accounted for by smallhold farmers.
Indonesia's Palm Oil Production and Export:
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013¹ | |
| Production (million metric tonnes) |
19.2 | 19.4 | 21.8 | 23.5 | 26.5 | 28.0 |
| Export (million metric tonnes) |
14.2 | 15.5 | 15.6 | 16.5 | 18.1 | 21.0 |
| Export (in USD$ billion) |
15.6 | 10.0 | 16.4 | 20.2 | 21.6 |
¹ indicates forecast
Sources: Food and Agriculture Organization of the United Nations, Indonesian Palm Oil Producers Association (Gapki) and Indonesian Ministry of Agriculture
Indonesia's Natural Rubber Production and Export:
| 2008 | 2009 | 2010 | 2011 | 2012 |
2013¹ | |
| Production (in million tonnes) |
2.75 | 2.44 | 2.73 | 3.09 | 3.04 | 3.20 |
| Export (in million tonnes) |
2.30 | 1.99 | 2.20 | 2.55 | 2.80 | 2.70 |
¹ indicates a forecast
Sources: Association of Natural Rubber Producing Countries, Indonesian Rubber Association (Gapkindo), and Food and Agriculture Organization of the United Nations