REPUBLIKA.CO.ID, JAKARTA -- The government would prioritize trade diplomacy for Indonesian palm oil sector, after the European Union Parliament's decision to exclude palm oil as biofuel source in the region by 2021. Coordinating Minister for Maritime Affairs, Luhut Binsar Pandjaitan, stated that the government would prioritize dialogue and lobbies, especially regarding the EU Parliament's decision discriminating palm oil products.

"The Indonesian government would prioritize trade diplomacy that puts forward dialogue and lobbies, and explain the government's measures to apply sustainable palm oil sector," Pandjaitan noted here on Tuesday.

Palm oil has become an activator of the country's economy, as it has provided jobs for some 17.5 million Indonesians, with majority being small-scale farmers.

A resolution of the EU Parliament proposed the exclusion of palm oil as material source for biodiesel. Currently, the resolution is yet to receive legal binding, and Indonesia would continue to prevent it from becoming an EU joint decision.

Palm oil has been a strategic industry for the country, he added.

With the increased productivity of palm oil reaching 4-6 tons per hectare from 12 million hectares of land, the country's palm oil production is expected to reach 40 to 45 million tons.

He revealed that with crude palm oil price estimated at a range of between US$800 and 850, the potential for state revenue could reach $45 billion.

"This does not include palm oil derivative products yet. If we talk about the derivative products, (the state revenue) could reach $60 billion. Hence, this is a very strategic industry for the future," Pandjaitan pointed out.

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