Wednesday, 06 February, 2008 | 16:25 WIB
TEMPO Interactive, Jakarta: The government’s policy to increase crude palm oil (CPO) export levy up to 25 percent - if international prices go beyond US$1,300 per ton - will not be effective to lower cooking oil price in the domestic market.
This is because CPO prices will probably continue increasing and by followed by local cooking oil manufactuers.
“It would be different if what was intensified were cooking oil subsidies,” Akmalludin Hasibuan, General Chairman of the Indonesian Palm Oil Producers Association, told Tempo in Jakarta yesterday (5/2).
The statement was a response to the government’s policy that set a progressive export levy through the food policy package of February 1.
The decision was that the CPO export levy go up 25 percent.
Adiwisoko Kasman, Head of the Indonesian Cooking Oil Industry Association, estimated that retail cooking oil prices could go down 10 percent after the government bears the value-added tax (VAT).
But if the external factors rises (CPO prices in the international market), we don’t know. Today (yesterday) CPO prices in the international market rose very high, even exceeding US$1,100 per ton,” he said.
In the mean time, Director General of Domestic Trade, Ardiansyah Parman, confirmed that the government will not set the target of cooking oil price decrease at a certain level due to the implementation of the food price stability policy.
“The target is that the household (cheap market) price goes down by Rp2,500 per kilogram, not the national price down by Rp2,500,” he said.
Ardiansyah went on to say that the government could only hope that cooking oil price will go down during the next six months.
The government, according to him, had difficulties in targeting the price decrease as the CPO price trend in the international market is currently fluctuating.
Trade Minister Mari Elka Pangestu is still optimistic that unbranded and packaged cooking oil prices will go down after the government bears the VAT.
“The packaged cooking oil price should be able to go down 10 percent,” she said.