Yemisi Izuora
Indonesian Palm Oil Producers Association (Gapki) executive director Fadhil Hasan has said that local palm oil producers are expanding their markets to West African countries, where demand for crude palm oil (CPO) was on the rise on the back of growing economies and relatively stable politics.
“Our CPO exports to Africa, especially West Africa, has been surging and it is even close to that of China this year,” he said.
According to Fadhil, total CPO exports to Africa reached 1.3 million tons in the first seven months of this year, already close to the 1.7 million tons exported in 2014.
Exports to China, meanwhile, declined to 1.9 million tons in the January-July period of this year from around 2 million tons during the same period last year.
In terms of value, the country’s CPO exports to West Africa hit $416.2 million in the January-July period of this year, with CPO exports to China standing at $1.09 billion during the same period or a 9 percent year-on-year (yoy) drop, according to data from the Agriculture Ministry.
Many CPO producers have started turning to new market hubs other than China since the middle of last year as the Asian giant has booked around 7 percent in gross domestic product (GDP) growth — a level unseen since 1990.
In a separate development, while not necessarily moving away from its main markets in the US, Europe and Asia, textile producers have been trying to tap deeper into the African market, according to the Indonesian Textile Association (API).
“Most our exports to Africa are through resellers in Dubai that sell the products using their family connections in the continent,” said API chairman Ade Sudrajat.
Egypt, Nigeria and South Africa, according to Ade, had been among popular export destinations within the African market for garment exporters.
With their love for fashion, the US and Europe are the largest importers for Indonesia’s textile products, accounting for 36 percent and 14 percent of the total exports, respectively, according to API’s data.
The Middle East, through which most African markets get their supply for Indonesia’s textiles, makes up around 23 percent, followed by the Southeast Asian market and Japan.
Alternative markets for exports have become important for Indonesia amid the current economic slowdown in most its main export destinations, such as China and the EU.
Nino Wawan Setiawan, head of the Indonesian Trade Promotion Center (ITPC) in Nigeria, said recently that his team was aggressively forging trade to Benin, Togo and Ghana as complimentary to Indonesia’s main market in West Africa.
The market expansion is considered important as Nigeria is facing an economic slowdown amid the oil price drop and weakening of its local currency against the US dollar, he went on.
“ITPC Lagos is aiming for the three countries through a number of business meetings and promotional activities,” Nino said in a statement.
Compared to Nigeria, the three countries were more economically stable as they did not rely heavily on crude oil exports, he went on.
Indonesia booked a trade surplus with the three countries, with most exports coming from non-oil and gas commodities.
Indonesia’s trade surplus with Benin hit $182.02 million last year, $131.7 million with Togo and $183.6 million with Ghana, according to Trade Ministry data.