Goverment urged to drop taxes on CPO, oleins<\/p>\n
JAKARTA (JP): The Federation of Edible Oil and Fats
\nAssociations yesterday called on the government to drop export
\ntaxes on crude palm oil (CPO) and oleins -- CPO products for
\ncooking oil production -- to regain Indonesia's stake in overseas
\nmarkets.<\/p>\n
The chairman of the federation, Sawarno, told a hearing with
\nthe Trade and Logistics Commission of the House of
\nRepresentatives that the introduction of the export taxes has
\ncaused Indonesia to lose its market shares on the world market,
\nparticularly in European and Middle East countries.<\/p>\n
\"We are already having difficulties in reentering European and
\nMiddle East markets ... And I'm afraid, in the future, Indonesia
\nwill lose more of its market shares,\" Sawarno said.<\/p>\n
The government introduced the export taxes on CPO and oleins
\nlast September to protect local producers of cooking oils and
\nstabilize their domestic prices.<\/p>\n
When the government introduced the taxes, CPO prices on the
\nworld market reached its highest point since 1984 to US$700 per
\nton.<\/p>\n
\"However, the prices on the world market have fallen to $600
\nper ton. And I believe it will continue to drop in the future and
\nsuch taxes, therefore, will not be necessary anymore,\" Sawarno
\nsaid.<\/p>\n
He argued that the prices of agricultural commodities,
\nincluding CPO, widely fluctuate on the world market and,
\ntherefore, he suggested that the government not worry about price
\nchanges.<\/p>\n
Meanwhile, Moh. Nafis Daulay, chairman of the Association of
\nCooking Oil Producers, said that the introduction of progressive
\ntax rates on CPO exports may discourage new investments in CPO
\nproduction.<\/p>\n
The government is currently engaged in an intensive campaign
\nto encourage investors to open palm oil plantations in a bid to
\nincrease annual CPO production to around seven million tons by
\nyear 2000 from around four million tons at present.<\/p>\n
Trust<\/p>\n
Nafis explained that the export taxes have also diminished
\nforeign buyers' trust in Indonesia's exporters because the latter
\ncannot ensure stable supplies.<\/p>\n
\"They might have turned to Malaysia's exporters, which are
\nbecoming more powerful on the world market,\" Nafis said.<\/p>\n
Malaysia produces some seven million tons of CPO annually,
\ncontrolling almost 60 percent of the world's output.<\/p>\n
Nafis noted that the government has failed to protect local
\nproducers because the current export taxes are encouraging people
\nto export CPO because the tax rate on it is much lower than that
\non oleins.<\/p>\n
He also questioned the government's effort to stabilize
\ndomestic cooking oil prices by imposing export taxes, saying that
\nthe government should better liberalize trade so that there is no
\nsignificant difference between domestic and overseas prices.<\/p>\n
The government-run semi-buffer stock agency Bulog has
\ntargeted to maintain the price of cooking oil at Rp 1,300 ($59
\nU.S. cents) per kilogram.<\/p>\n
Operation<\/p>\n
Bulog, which has bought 150,000 tons of CPO and sent it to
\nSalim Group's and Sinar Mas' processing plants, has been using
\nthe additional cooking oil products for market operations to
\nstabilize domestic prices during the New Year and the fasting
\nmonth.<\/p>\n
Meanwhile, Wulani W. Rismono of Hasil Group, which produces
\ncooking oil under the Vetco brand, noted that the current surge
\nof cooking oil prices, reaching between Rp 1,800 and Rp 2,000 per
\nliter, is the psychological effect of the fasting month.<\/p>\n
She said cooking oil prices from the plants remain the same --
\nat between Rp 1,300 and Rp 1,400 per liter.<\/p>\n
\"It must be the retailers who get the largest portion of
\nprofits,\" she said. \"However, it must be kept in mind that there
\nare losses of about 20 percent of cooking oil sent from factories
\nto retailers due to technical reasons.\" (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/goverment-urged-to-drop-taxes-on-cpo-oleins-1447893297",
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