Palm Oil Export to China to Remain High Without Tariff Cut

CHINA’S policy to cut import tariff on soybean, canola, and sun flower will not adversely affect palm oil import from Indonesia, given the fact that the commodities are mostly used for animal feed. “The policy is mainly for products of soybean, canola, and sun flower that are often used for animal feed so that it will not affect significantly Indonesian palm oil export,” Executive Director of the Indonesian Palm Oil Association (Gapki) Mukti Sardjono, Wednesday (26/12/2018) as reported by Sawit Indonesia. As reported earlier by South China Morning Post, (26/12/2018), China will cut import tariff on more than 700 products, not included palm oil, starting from 1 January 2019. Gapki strongly believes Chinese demand for palm oil from Indonesia will remain high as the country is implementing biofuels mandatory, including palm oil-based biofuels. “China will always need palm oil for biofuels,” Mukti added. The temporary rates can be changed ad hoc and can be lower than the current Most-favoured nations (MFN) standard, although they are also available to all World Trade Organisation members. This is the third round of tariff cuts announced this year as China looks to cut costs for consumers and implement President Xi Jinping’s promises to open up further. US exports will receive the benefit of the reductions as well, although most products will still be subject to the retaliatory tariffs until there is a breakthrough in the ongoing talks. ***