Indonesia and Malaysia have threatened to retaliate a potential trade war with the EU on palm oil products
JAKARTA (BLOOMBERG) – Indonesia, the world’s top palm oil producer and consumer, is joining Malaysia in removing anti-palm oil products from grocery store shelves.
Local and imported food items that are labelled “palm oil free” or “no palm oil”, found at some high-end stores, will be removed, Ms Penny K Lukito, head of the National Agency of Drug and Food Control, said on Wednesday (Aug 21).
Indonesia and Malaysia, which together make up about 85 per cent of global palm oil supply, are upping their fight against what they say are discriminatory actions by some developed countries.
They have threatened to retaliate in a potential trade war with the European Union after the bloc decided to place stricter limits on the tropical oil’s use in biofuels on concerns over deforestation.
“The labelling is part of a black campaign to undermine the competitiveness of Indonesian palm oil,” Ms Lukito told reporters in Jakarta. “Palm oil is very important for Indonesia and it is the government’s duty to protect the industry.”
The agency will initially educate and persuade the sellers, she said. Legal action will be taken if the stores continue to sell those products, she added. She declined to name the retailers.
There is a perception among people living in urban areas that palm oil is not healthy, which encourages consumers to avoid the product, but that hasn’t been scientifically proven, Ms Lukito said.
The agency, as well as the Indonesian Palm Oil Board and the Trade Ministry, will hold a campaign to raise health awareness, she said.