REPUBLIKA.CO.ID, JAKARTA -- Chinese palm oil importers have asked Indonesia to scrap export tax on the oil to avoid intense competition between the countries, Indonesian Deputy Trade Minister Bayu Krisnamurthi said.

"The government will consider the proposal to scrap the export duty but, on the other hand, it must take into account its national interests," Bayu said at a closed-door meeting with the China Cleaning Industry Association (CCIA) in Shanghai, China, on Friday, Sept 19.

Director of Promotion and Image Development of the Trade Ministry Pradnyawati said in a press statement released on Saturday that Bayu held the meeting as part of efforts to expand the market for Indonesian crude palm oil and its derivatives within the world's most populous country.

However, Bayu rejected the proposal and will continue efforts to expand the market for Indonesian palm oil in China, with a population of 1.4 billion, Pradnyawati said.

She noted that the deputy trade minister had asked the Association of Indonesian Palm Oil Producers (GAPKI) to intensify their communications with Chinese palm oil importers.

"The Indonesian government pays attention to various developments in the palm oil industry, particularly with regard to its cooperation partners, and encourages the palm oil industry to create more jobs for the Indonesian people," she quoted Bayu as saying.

China is the third largest market for Indonesian palm oil, after India and the European Union.

Indonesia remains optimistic that the meeting will lead to an important breakthrough to increase palm oil exports to China, officials said.

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