Jakarta: The special instruction of Prime Minister Muhammad Shehbaz Sharif, Minister for Industries and Production Makhdoom Syed Murtaza Mahmud led a delegation to Jakarta from 12-14 June 2022. The objective of the visit was to minimize the impact of the recent decision of the Government of Indonesia to ban the export of Palm oil on Pakistan’s economy and ensure the steady flow of the commodity in the Pakistani market. Pakistan is the third-largest importer of Indonesian Palm Oil. In 2021, Pakistan had imported 2.78 million tonnes of Palm oil from Indonesia.
During the visit, Minister Syed Murtaza Mahmud met with the Indonesian Minister of Trade Mr. Muhammad Lutfi, Minister of Industry Mr. Agus Gumiwang Kartasasmita Coordinating Minister of Maritime and Investment Affairs, Mr. Luhut Binsar Panjaitan, and Minister of Industries, Mr. Agus Gumiwang Kartasasmita. Representatives of the largest Palm oil exporters to Pakistan and the Chairman of the Indonesian Palm Oil Association also called on the Minister.
In his interaction with the Indonesian Minister of Trade, while highlighting the strong historical and brotherly relations between Pakistan and Indonesia, Minister Mahmud underscored that Pakistan, being the third-largest market for Indonesian palm oil, was heavily dependent on Indonesian palm oil. He sensitized the Indonesian minister of the situation of edible oil in Pakistan and mentioned that Indonesia’s decision to ban palm oil export for a month had adversely affected the stocks of edible oil in Pakistan. Even after the ban had been lifted on 23 May 2022, the exporters are still facing regulatory and logistical bottlenecks. He urged his Indonesian interlocutor to facilitate the earliest possible resumption of palm oil shipments to Pakistan by removing the bottlenecks.
In response, the Indonesian Minister assured that Indonesia attached great importance to its relations with Pakistan and was ready to ensure an uninterrupted flow of Indonesian Palm Oil to Pakistan. He further stated that after completing the necessary formalities, the first shipment of palm oil to Pakistan is expected to sail within 24 hours. The Minister further stated that he would ensure that the first shipment leaves the Indonesian port by the next day. The Minister also assured that Pakistan would be the first country to which the commodity will be exported, after the promulgation of new export regulations.
Both the ministers discussed bilateral economic and trade relations. Minister Mahmud underscored the urgency of bridging the huge trade imbalance between the two countries. The two Ministers identified SMEs, agriculture, tourism, industrial joint ventures, and other non-traditional sectors as possible areas of collaboration. Minister Lutfi agreed to visit Pakistan to discuss these issues with his Pakistani counterpart.
During his meeting with Coordination Minister Luhut Binsar Panjaitan, who has been assigned by President Jokowi to coordinate local distribution and export of Palm oil, Minister Mahmud underscored the need to ensure uninterrupted delivery of the commodity to Pakistan. Minister Luhut promised to make sure that the delivery of Palm Oil to Pakistan is resumed at the earliest. He further stated that he has directed to ensure steady flow to the commodity in the future.
Minister Mahmud and his Indonesian counterpart, Mr. Agus Gumiwang Kartasasmita exchanged views on bilateral cooperation in the industrial sectors, particularly in the production of e-vehicles, cell phones, electronics, and agro-based industries. The Minister highlighted the potential of investment in Pakistan in various sectors, and opportunities emerging from SEZs and invited the Indonesian businessmen and entrepreneurs to invest in Pakistan. The Minister also invited his Indonesian counterpart to visit Pakistan, which was accepted. The visit of Minister Mahmud was timely to secure the resumption of the export of Indonesian Palm Oil to Pakistan and avoid a shortage of the commodity in the market. Due to the Minister’s personal intervention, two shipments of Palm Oil carrying 30,000 and 27,000 would leave for Pakistan today. Another 8 shipments carrying 190,000 tons of Palm Oil are expected to reach Karachi before the end of June 2022.
