Indonesia plans to change CPO exports duty rule

JAKARTA, June 25 (Xinhua) -- The Indonesian government will likely change the regulation that sets the crude palm oil export tax amid growing protests from producers, a senior trade official has said here.

The Jakarta Post quoted Trade Ministry foreign trade director general Deddy Saleh as saying on Saturday that the new rule would expand the use of palm oil reference prices to three markets -- Jakarta (Indonesia), Kuala Lumpur (Malaysia) and Rotterdam (the Netherlands) to ensure more accurately reflected market prices.

Currently, oil palm prices are established according to the average price index in the commodities exchange in Rotterdam a month before the establishment of the export base price, he said.

The CPO export tax might be issued by the Finance Ministry next month as a response to the producers' protests, said Saleh. Currently the tax is issued by the trade ministry.

"(Under the new regulation) the export duty will remain progressive, but it will accommodate all interests," he said on Friday.

The Indonesian Palm Oil Producers Association (Gapki) chairman Fadhil Hasan, however, said that the proposed new regulation might not bring significant benefits for palm oil producers.

On Wednesday, the government announced that the export duty for July deliveries would be 20 percent, rising from 17.5 percent in June.

Indonesia is the world's largest palm oil producer.

June 25, 2011

Source: Xinhua News