Indonesia is seeking to expand its footprint in the Russian crude palm oil market, saying there remains a large opportunity to tap the country, where only 2 percent of Indonesia’s CPO is currently exported.
“We keep looking for new markets, including Russia, which has market potential [for CPO] up to 2 millions tons,” the director general for foreign trade at the Trade Ministry, Deddy Saleh, told a press conference on Indonesia’s palm oil industry in Jakarta on Tuesday.
He added 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.
Deddy 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,” he told the same press conference. “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.”
In 2011, Indonesia exported 323,800 tons of palm oil, worth $357.8 million, 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.