Indonesia to remain top palm oil supplier for US
Indonesian minister says tariff rate gap could give Jakarta edge over Malaysia in palm oil trade with United States
JAKARTA, Indonesia (MNTV) – Indonesia is set to maintain its dominance in the American palm oil market after the US agreed to slash its reciprocal tariff on Jakarta from 32 % to 19 %, much lower than its competitor, Malaysia, reports Jakarta Globe.
Malaysia is facing a tariff of 25% based on President Donald Trump’s letter issued last week.
The US government has already imposed a 10% baseline tariff on both palm oil-producing countries, just like the rest of the world.
Agriculture Minister Andi Amran Sulaiman said that the tariff rate gap could give Jakarta an edge on Malaysia in palm oil trade with the US.
“Our only competitor in crude palm oil [CPO] is Malaysia, isn’t it? And this is a golden opportunity for our agriculture sector,” Andi told reporters in Jakarta.
According to the Indonesian Palm Oil Association, the country exported 2.2 million tons of palm oil to the United States last year, reaching $2.9 billion in value. Indonesia accounts for around 85% of US palm oil imports.
Fadhil Hasan, the international affairs head at the association, recently warned that the US might turn to Malaysian palm oil if Jakarta failed to secure a lower tariff. The higher the tariff, the more expensive overseas goods will become for American consumers.
The US bought 191,000 tons of Malaysian palm oil last year. This was equivalent to about 10% of US palm oil imports.
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