Indonesia warns may bar EU milk powder if palm oil sales restricted

NUSA DUA, Indonesia, Nov 3 (Reuters) - Indonesia, the world’s biggest producer and exporter of palm oil, said it could block milk powder imports from the European Union if the bloc pushes forward with a resolution to restrict imports of the vegetable oil.

Indonesia’s exports of palm oil in 2016 were worth $18 billion, with the EU accounting for 16 percent of its sales last year.

But the EU is concerned that booming demand for palm oil is causing massive deforestation. France has said it will reduce the use of palm oil in biofuel and the EU parliament in April voted for a resolution endorsing a single certification for Europe-bound oils to ensure production is sustainable.

“If they continue then I will do the same thing,” trade minister Enggartiasto Lukita told reporters on the sidelines of a palm oil conference in Nusa Dua, Bali.

The minister said Indonesia was prepared to restrict imports of milk powder “if the EU treats us unfairly and is discriminatory.”

Indonesia imports milk powder from EU countries, as well as Australia and the United States.

Lukita in May warned his EU counterparts that he might ask Jakarta not to buy Airbus aircraft in retaliation, the Jakarta Post reported.

The chairman of Indonesia’s palm oil group Joko Supriyono said the country’s palm oil governance met international standards, but added palm exporters have started to look for alternative markets to ease the potential squeeze in Europe. (Reporting by Emily Chow in NUSA DUA, Indonesia; Writing by Fransiska Nangoy in JAKARTA; Editing by Ed Davies and Subhranshu Sahu)