Ban on CPO exports finally lifted

Ban on CPO exports finally lifted

JAKARTA (JP): The government has finally lifted its ban on
exports of crude palm oil (CPO) and its byproducts, beginning
today, through a ministerial decree.

The decree, signed last Friday by Minister of Industry and
Trade Mohamad "Bob" Hasan, ended the much-criticized ban on the
export of CPO, refined bleached deodorized (RBD) palm oil, crude
olein and RBD olein.

"With this decree, the trade of CPO and its derivatives can
now be conducted freely," the decree says.

But the decree did not mention the export taxes which had been
mentioned earlier would replace the ban.

Some traders have indicated that the export taxes will be 40
percent for CPO, 38 percent for RBD palm oil and crude olein, 4
percent for RBD stearin and zero percent for palm kernel oil and
RBD palm kernel oil.

Abolishing the palm oil export ban was one of the measures
agreed by the Indonesia government earlier this month with the
International Monetary Fund (IMF) in exchange for the continued
disbursement of a $43-billion bailout fund.

The agreement requires the government to remove the ban on
palm oil exports and replace it with an export tax of 40 percent
by today.

In January, Hasan's predecessor Tunky Ariwibowo banned the
export of palm oil and olein as well as CPO derivatives including
stearin and palm kernel oil to stabilize soaring prices of
cooking oil in the domestic market. But the measure failed to
ensure the desired price stability.

The monetary crisis has seen the rupiah's value collapse by
more than 70 percent against the U.S. dollar since last July,
prompting a sharp increase in prices of most commodities.

The ban also created confusion and frustration among palm oil
traders, who have been baffled by inconsistent government
statements regarding its continuance.

On Jan. 15, the government agreed in the IMF's second reform
package that it would remove the ban in April, but later
backtracked on its promise.

This and several other backtracks on promised reforms prompted
the IMF to review its bailout package for Indonesia, which in
turn led the country to negotiate another deal with the Fund on
April 8.

The Ministry of Industry and Trade has also issued several
decrees easing export restrictions of other forestry products
including logs, sawn timber and rattan. (das)