CPO exports fall in response to strong rupiah<\/p>\n
JAKARTA (JP): Producers of crude palm oil (CPO) have cut back
\non exports as the rupiah gains some strength against the U.S.
\ndollar and the government maintains a high export tax on the
\nproduct, an industry executive has said.<\/p>\n
The chairman of the Association of Indonesian Palm Oil
\nProducers (Gapki), Derom Bangun, said on Wednesday exports were
\nno longer profitable due to the rupiah's strength, and most of
\nthe producers were now selling the commodity on the local market.<\/p>\n
\"The price that the local processors (of crude oil) pay is
\nslightly higher than the profit we get from exporting,\" Derom
\ntold The Jakarta Post by telephone from Medan.<\/p>\n
The international free-on-board price of CPO is currently
\nUS$660 per metric ton, or 66 U.S. cents per kilogram.<\/p>\n
At the current exchange rate of about Rp 8,800 per U.S. dollar
\nplus a 60 percent export tax, it amounts to about Rp 2,100 per
\nkilogram, compared to the domestic price of around Rp 2,300, he
\nsaid.<\/p>\n
Last June, the government raised export taxes on CPO and its
\nby-products to up to 60 percent in a bid to discourage exports of
\nthe commodities, the main ingredient in local cooking oil.<\/p>\n
The rupiah revived to about the 8,000 level in recent weeks
\nafter it traded at around 12,000 in August and early September.<\/p>\n
However, Derom said local processors of cooking oil could not
\nabsorb all the CPO output in the country, resulting in at least
\n400,000 tons stored in tanks awaiting processing into olein.<\/p>\n
Half of the amount was produced by the state-owned CPO
\nproducers and the rest belonged to private firms.<\/p>\n
This created opportunities for local processors to suppress
\nthe CPO price in the domestic market, he added.<\/p>\n
\"Several weeks ago the domestic price of CPO was better than
\nthe profit we get from exporting, but the domestic price
\ncontinued to go lower and lower. Now, the domestic price and
\nexport prices are almost at the same level.\"<\/p>\n
Several producers have begun exporting again as the domestic
\nprice lowers, but others are currently waiting for government to
\nlower the CPO export tax, he said.<\/p>\n
Minister of Trade and Industry Rahardi Ramelan on Tuesday
\nreiterated that the government would not lower the taxes on CPO
\nand its by-products until after the Moslem Idul Fitri festivities
\nin January to ensure the local supply.<\/p>\n
Derom said demand for cooking oil normally rose by 20 percent
\nto 30 percent during the Idul Fitri holiday from the average
\nmonthly demand of 160,000 tons.<\/p>\n
The state-owned plantation companies (PTPNs) are required to
\nsell all their production to the Indonesian Distribution
\nCooperatives (KDI), he said.<\/p>\n
KDI was appointed by the government in September to replace
\nthe State Logistics Agency (Bulog) in distributing cooking oil in
\nthe country after subsidies on the commodity were lifted.<\/p>\n
Derom said the PTPNs' tanks were overflowing while KDI bought
\nin volumes below the companies' productions.<\/p>\n
\"Some of the companies had stocks of 40,000 tons of CPO in
\ntheir tanks while they could not get cash flow because KDI was
\nbuying in very small volumes.\"<\/p>\n
Some PTPNs could no longer finance their operations from the
\nsales of CPO, forcing them to obtain bridging finance from banks
\nwhich imposed interest rates of 35 percent to 40 percent, he
\nsaid.<\/p>\n
Production of CPO this year is expected to reach 4.8 million
\ntons from the initial target of 5.9 million tons. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cpo-exports-fall-in-response-to-strong-rupiah-1447893297",
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