Govt's policy on CPO gets cool response<\/p>\n
JAKARTA (JP): The government's recent move to cut the export
\ntax on crude palm oil (CPO) has received a cool response from
\nproducers.<\/p>\n
Chairman of the Indonesian Palm Oil Producers Association
\n(Gapki) Derom Bangun said here on Friday the cut in the export
\ntax was meaningless because the government had raised the
\nreference price of the commodity.<\/p>\n
He said if the government wanted to raise the reference price
\nof CPO -- the price level used to calculate tax payments --, the
\ntax export should be totally removed.<\/p>\n
\"With the higher price reference, the cut in the export tax
\nbrings no help at all in improving the competitiveness of the
\ncountry's CPO in the world market,\" he told The Jakarta Post.<\/p>\n
He said Gapki would send a letter to the government next week
\ndemanding a review of its export tax policy. \"We want the
\ngovernment to scrap the export tax of CPO,\" he said.<\/p>\n
The government cut on Tuesday the export tax of CPO to 5
\npercent and its by-products to 2 percent. The export tax of CPO
\nwas previously set at 10 percent while that for by-products such
\nas refined bleached deodorized (RBD) palm oil and RBD palm olein
\nwas set at 8 percent and 6 percent respectively.<\/p>\n
The reference price of CPO was, however, raised to US$190 from
\n$120. The new reference price of oil palm kernel is $40, RBD palm
\noil $200, crude palm olein $195 and RBD palm olein $215.<\/p>\n
The government's announcement of the reduction in the export
\ntaxes of CPO and its by-products was made amid plans by Malaysia
\nto increase palm oil exports by about one million tons over the
\nnext six months in a bid reduce its stock pile and boost prices
\nwhich are at a 13-year low.<\/p>\n
Derom said in order to support the local CPO producers in
\ncoping with the current volatile market, the Malaysian government
\nhad offered tax incentives to its producers and a credit facility
\nfor foreign buyers.<\/p>\n
Malaysia has given special treatment to six local CPO
\nproducers to ship their products overseas without any export tax
\ncharges. Four other local companies were earlier given the same
\ntreatment.<\/p>\n
The Malaysian government has also offered a credit facility
\ntotaling $135 million to five countries, namely Russia, Myanmar,
\nBangladesh, Egypt and South Korea, so that those countries could
\nimport more CPO from Malaysia. The country expects the credit
\nfacility will boost its CPO exports by about 500,000 tons.<\/p>\n
Derom said it would be difficult for Indonesia to compete with
\nMalaysia if the government maintained the current tax and
\nreference price level.<\/p>\n
\"Unfortunately, in Indonesia, not only is the will of the
\ngovernment missing, but it also doesn't seem to have any
\nunderstanding,\" Derom said.<\/p>\n
He acknowledged that it would be difficult for the Indonesian
\ngovernment to introduce similar incentives like those provided by
\nMalaysia but he said that the total removal of the export tax
\nwould be quite feasible.<\/p>\n
Indonesia's total CPO production is predicted to increase this
\nyear to 6.5 million tons and to over seven million next year.<\/p>\n
The country, which is the world's second largest CPO producer,
\nproduced 5.9 million tons of CPO last year, up 6 percent from
\n1998's output of five million tons.<\/p>\n
Derom predicted about three million tons of this year's total
\nCPO production would be shipped to overseas markets.<\/p>\n
Local producers were now facing difficulties in selling the
\ncommodity in the domestic market as demand had fallen behind the
\navailable supply, he said.<\/p>\n
He said the recently slow domestic trading of CPO had resulted
\nin higher stock of more than 700,000 tons, all of which must
\nimmediately be exported to avoid bigger losses on the producers'
\nside. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govts-policy-on-cpo-gets-cool-response-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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