80% of CPO products to be sold locally
80% of CPO products to be sold locally
JAKARTA (JP): Indonesia's palm oil producers have agreed to
sell 80 percent of crude palm oil products on the domestic
market, despite the government's recent decision to remove an
export ban on the commodity.
Chairman of the Association of Edible Oils industries
(AIMMI) Navis Daulay said yesterday the consensus had been
reached to ensure a sufficient supply was available in Indonesia.
He said the initiative to sell the majority of their output on
the domestic market had come from his association and the
Association of Indonesian Palm Oil Producers, not from the
government.
"We expect to produce a total of 293,000 tons of CPO this
month to supply domestic demand of 260,000 tons," Navis told The
Jakarta Post in a telephone interview.
The Federation of Edible Oil and Fats Associations also said
yesterday that 18 companies had agreed to supply CPO locally,
including the joint marketing office of state-owned PT Perkebunan
Nusantara (PTPN), which intends to supply 120,000 tons of the
293,000 tons promised.
On April 22, the government lifted a three and a half-month
ban on the export of CPO and its derivatives, replacing it with
an export tax of up to 40 percent to protect local supply.
Traders said the high tax meant that exporting was no longer
profitable, prompting companies to sell their products on the
local market rather than overseas.
The Coordinating Minister for Economy, Finance and Industry
Ginandjar Kartasasmita said earlier that the country's major
private CPO producers had also agreed to sell half of their
production on the domestic market this year.
Ginandjar said the combined output of the four companies,
Sinar Mas, Salim, Radja Garuda Mas and Astra Group, would reach
1.62 million tons this year, 29 percent of Indonesia's total
projected CPO output in 1998 of 5.6 million tons.
FAMNI's chairman Derom Bangun predicted the exported volume of
CPO would drop by at least 15 percent this year from 2.3 million
tons last year, mainly due to the export ban, which was
introduced to stabilize cooking oil prices.
CPO producers also agreed on April 13 to sell CPO, the raw
material required to manufacture cooking oil, to processing
factories at Rp 2,640 per kilogram so that the price of cooking
oil could be lowered to Rp 3,250.
But Navis said cooking oil prices were continuing to hover
between Rp 3,500 and Rp 3,600 per kilogram because most traders
were holding stocks and had no need to make new purchases.
"But at least we have succeeded in keeping the price from
soaring," he added. (das)