Mumbai, 11 Sep (Commoditiescontrol): Indonesia's palm oil sector is facing considerable disruption due to an impending European Union regulation effective December 30, which requires importers to ensure their commodities, including palm oil, have not contributed to deforestation. Eddy Martono, head of the Indonesian Palm Oil Association (GAPKI), has expressed significant concerns to The Financial Times regarding the law's immediate implementation.
The legislation aims to curb deforestation by targeting key imports like coffee, cocoa, rubber, and palm oil. It mandates large corporations to prove compliance from the outset, while granting smaller entities until July 2025 to conform. Violations could incur fines up to 4% of a firm's annual EU turnover.
Martono has called for a postponement of the law until 2026, pointing out the industry's lack of preparedness for such drastic regulatory changes. He criticized the EU for failing to engage adequately with trading partners, suggesting that this could lead to a 30% decline in Indonesian palm oil exports to the union. The absence of substantive consultations, according to Martono, has introduced widespread uncertainty, potentially jeopardizing the sector's stability.
(By Commoditiescontrol Bureau; +91-9820130172)
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