Indonesia may block EU milk powder imports

NUSA DUA (Bali): Indonesia, the world’s biggest producer and exporter of palm oil, said it could block milk powder imports from the European Union (EU) if the bloc pushes forward with a resolution to restrict imports of the vegetable oil.

Indonesia’s palm oil exports last year were worth US$18 billion (RM76.23 billion), with the EU accounting for 16 per cent of the sales.

But the EU is concerned that booming demand for palm oil is causing massive deforestation. France has said it would reduce the use of palm oil in biofuel, and the EU Parliament in April voted for a resolution endorsing a single certification for Europebound oils to ensure production is sustainable.

“If they continue then I will do the same,” said trade minister Enggartiasto Lukita on the sidelines of a palm oil conference, here.

The minister said Indonesia was prepared to restrict imports of milk powder “if the EU treats us unfairly and is discriminatory”.

Indonesia imports milk powder from EU countries as well as Australia and the United States.

He warned in May that he might ask Jakarta not to buy Airbus aircraft in retaliation, the Jakarta Post reported.

The chairman of Indonesia’s palm oil group Joko Supriyono said the country’s palm oil governance met international standards, but added that palm exporters had started to look for alternative markets to ease the potential squeeze in Europe.

Meanwhile, crude palm oil prices were likely to fall in the next four to eight weeks, but would not drop below RM2,650 per tonne, said leading industry analyst Thomas Mielke.

Palm oil production in Indonesia would be 38.3 million tonnes next year and at 48 million tonnes in 2025, Mielke forecast.

Mielke also predicts Malaysian production at 23.1 million tonnes by 2025.