REPUBLIKA.CO.ID, LAGOS -- The government has sought efforts to increase crude palm oil (CPO) export to Nigeria, following the West African country's policy to limit the commodity's import and impose a high tax duty to 35 percent.
Indonesia's Trade Minister Enggartiasto Lukita said he would hold a meeting with Nigeria Industry, Trade and Investment Minister Okechukwu Enelamah to discuss the issue.
During his visit to Nigeria, the minister visited edible oil company PZ Wilmar, a consumer of Indonesian CPO, which currently has only used 32 percent of its production capacity.
Some 80 percent of the company's CPO were imported from Indonesia, with total import of 8 thousand tons per month. In the absence of import restriction, the company could absorb 30 thousand tons of CPO per month.
In its effort to maintain foreign exchange market stability and assure the efficiency of exchange rate, Nigeria has issued a policy that restricts importers of certain goods and services from obtaining foreign currencies in the country's market.
The policy is aimed at encouraging domestic goods production.
Among the commodities in the list are palm kernel, palm oil and vegetable oil, rice, margarine, furniture, and other goods.
"Therefore, I will propose counter trade scheme to the president. We will discuss it. For tariff, like in South Africa, there must be an agreement from the Economic Community of West African States," Enggartiasto remarked.
A data of the Trade Ministry showed that Indonesia's CPO export to Nigeria has dropped from 191.4 million tons in 2014 to 90.4 million tons and 31.9 million tons in 2015 and 2016, respectively. Import during January-April 2017 was recorded at 8.7 million tons.
Total bilateral trade in 2016 reached $1.6 billion, with Indonesian export reaching $310.8 million and import at $1.28 billion, mostly in oil and gas.
While in non-oil and gas sector, Indonesia has recorded a surplus of $302.72 million.
Indonesia's non-oil and gas export to Nigeria includes paper, palm oil, and its derivatives such as medicines and seasoning.
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