Wednesday, July 6

Indonesia cuts maximum palm oil export levy to $200, but to rise in August

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JAKARTA — Indonesia on Tuesday issued

regulations backing recently announced changes on a palm oil

export tax policy, including cutting the maximum levy rate to

accelerate shipments that have been slow to rebound after the

ending of an export ban.

But the levy rate will be raised in August, according to the

finance ministry regulations, sparking concerns from an industry


Indonesia, the world’s biggest palm oil exporter, allowed

palm shipments to resume from May 23 following a three-week

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export ban designed to boost cooking oil stocks and keep runaway

local prices in check.

Authorities have since launched an export acceleration

program and tweaked tax rules after shipments were slow to

restart amid confusion over procedural issues.

Details of Tuesday’s regulations were in line with previous

announcements, including lowering the maximum levy rate for

crude palm oil to $200 a tonne from $375, effective until July


Indonesian exporters pay a levy and an export tax on

shipments and the government last week announced a hike in the

maximum export tax to $288 per tonne.

Overall, the combined ceiling for both the levy and tax

would be reduced to $488 per tonne from $575 per tonne to boost


The new rates apply to sales that are tied to the domestic

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distribution of cooking oil. The trade ministry recently bumped

up the allocation for such exports to 2.25 million tonnes, from

around 1 million previously.

Separately, under the export acceleration program

companies are allowed to sell stocks built up during the export

ban without having to join domestic cooking oil programs. But

they will have to pay a higher export tax of a maximum $488 a

tonne for crude palm oil, bringing the combined levy and tax to

$688 a tonne.

Indonesia had approved export permits as of Monday for 1.16

million tonnes of palm oil products under the program, which

expires on July 31.

The export acceleration program has helped companies to

empty their storage tanks, Eddy Martono, secretary general of

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the palm oil industry group GAPKI told Reuters.

But he warned to avoid hurting farmers authorities should

assess the international palm oil price and domestic fresh fruit

bunch price before imposing a hike in export levy rates

beginning Aug. 1 “so we can avoid a case when the price goes

down and the levy is raised.”

Details of the levy rates:

CPO reference Previous Levies from June Levies from

price levies 14 – July 31 Aug. 1

750-800 75 75 75

>800-850 95 95 95

>850-900 115 115 115

>900-950 135 135 135

>950-1,000 155 145 150

>1,000-1,050 175 150 165

>1,050-1,100 195 155 180

>1,100-1,150 215 160 190

>1,150-1,200 235 165 200

>1,200-1,250 255 170 210

>1,250-1,300 275 175 215

>1,300-1,350 295 180 220

>1,350-1,400 315 185 225

>1,400-1,450 335 190 230

>1,450-1,500 355 195 235

>1,500 375 200 240

(Reporting by Bernadette Christina Munthe; Writing by Gayatri

Suroyo; Editing by Tom Hogue and Ed Davies)



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