By Madelaine B. Miraflor
As the Department of Agriculture (DA) threatens to ban palm oil imports coming from Malaysia and Indonesia, representatives of the two Southeast Asian countries reached out to the Philippines to address the issue of dumping and smuggling of the commodity here.
Agriculture Secretary Emmanuel Piñol said Indonesia and Malaysia agreed to form a Tripartite Technical Working Group (TWG) to settle the palm oil dumping issue, which is causing local copra prices to go down.
The entry of cheaper, imported palm oil, used in manufacturing cooking oil, has dampened the demand for locally produced copra, which is also used in making the same product. This resulted to the collapse of copra prices in the country.
It was in November when the DA first sounded the alarm over excessive palm oil imports coming from Indonesia and Malaysia.
The agency particularly found out that the country’s palm oil imports from Malaysia and Indonesia grew to 200 million kilos in 2017 alone.
Piñol then recommended a temporary ban on palm oil importation from Malaysia and Indonesia, which he reiterated last week upon finding out that European Union has already banned the entry of palm oil imports from these two countries over environmental issues.
Under the rules of the World Trade Organization (WTO), member countries could initiate measures to safeguard its farmers affected by the dumping of excess commodities from other countries.
The ban is temporary and is effective only for a specified period.
During his call with Malaysian and Indonesian representatives, Piñol identified a few suggestions on how the TWG should go about the issue and “rationalize” palm oil exports to the Philippines.
He said that Malaysia and Indonesia’s palm oil exports should be kept at a level that would not hurt the Philippine coconut and local palm oil industry and that these two countries should check on reports of the smuggling of crude and refined palm oil to the Philippines.
Piñol also said that Malaysia and Indonesia must open up their markets to Philippine products, especially coconut based products, to correct the trade imbalance between the Philippines and these two countries.
To recall, the DA had sent a team to Indonesia in January to initiate trade negotiations. Philippines particularly asked Indonesia to open up its markets for more food commodities coming from here given that it exports tons of products here.
Every year, Indonesia nets as much as US$1 billion from exporting agriculture products, mainly palm oil, to the Philippines, while the latter can only export food products worth US$50 million to Indonesia.
It turned out that Indonesia is not keen to open up its market for more agriculture products from the Philippines, something that prompted the DA to consider also being more restrictive on food commodities coming from the country.