CPO export tax cut to 30% to help farmers income
CPO export tax cut to 30% to help farmers income
JAKARTA (JP): The government announced on Friday a reduction
in export tax on crude palm oil (CPO) to 30 percent from 40
percent in a bid to boost exports and farmers' incomes.
The Ministry of Trade and Industry's Director General of
International Trade Djoko Moeljono said export taxes on CPO
byproducts also had been lowered to as low as zero to 26 percent.
He said the decision was taken after seeing the continued
decline in CPO prices and that of its byproducts on the
international market.
"CPO prices in Rotterdam dropped significantly to US$410 per
metric ton in early June from $510 in May. If we maintain the
export tax at the current level, exporters will not export CPO
because they would suffer a great loss," he said at a news
conference.
The lower export tax, effective from Thursday, is expected to
encourage the country's CPO producers to boost their exports, he
said.
Under the new ruling, export taxes on CPO, bunches of fresh
fruit and oil palm kernel was cut to 30 percent from 40 percent
previously.
Export taxes on refined bleached deodorized (RBD) palm oil and
RBD palm olein were lowered to 22 percent from 32 percent.
The government also slashed taxes on exports of crude olein to
26 percent from 40 percent, crude palm kernel oil to 20 percent
from 30 percent and on RBD palm kernel oil to 15 percent from 20
percent.
It also reduced from 25 percent to 17 percent the export tax
on prepackaged RBD olein not exceeding five kilograms in volume.
It lowered export taxes of crude stearin to 15 percent from 20
percent and of RBD stearin to 7 percent from 10 percent.
The government imposed zero export taxes on crude coconut oil
and RBD coconut oil, from 15 percent and 10 percent respectively.
Director General of Domestic Trade Teddy Setiadi said the
lower export taxes should not result in a steep increase in
cooking oil prices on the domestic market because prices had been
relatively stable in the past several months.
"Most domestic cooking oil processors currently have enough
stock to supply the domestic market. So I predict no steep
increase in the domestic prices of cooking oil in the coming
weeks," he said.
He also said the lower export taxes would raise the prices of
bunches of fresh fruit and oil palm kernel produced by farmers by
between Rp 150 to Rp 300 per kilogram.
Djoko said the ministry also cut the reference prices used to
calculate the payment of export taxes on CPO and its byproducts.
The new reference price of CPO was set at $365 per metric ton,
a drop from $430. The new reference price of oil palm kernel is
$85 per ton, refined bleached deodorized (RBD) palm oil is $395
per ton, crude palm olein is $385 per ton and RBD palm olein is
$460 per ton.
The base price of RBD palm olein in up to five-kilogram
packages was set at $455 per ton, while the reference price for
crude palm stearin was established at $260 per ton. The new
reference price for RBD palm stearin is $290 per ton, crude palm
kernel oil is $435 per ton and RBD palm kernel oil is $460 per
ton.
The new reference prices will be effective from June 3 to July
5.
Djoko acknowledged that export taxes should have been lowered
three months ago after international prices showed a tendency to
decrease early this year.
Djoko said the government planned to slash export taxes on CPO
and its derivatives to as low as 10 percent by the end of this
year.
"We are targeting to lower the export taxes to as low as 10
percent by the end of this year to comply with the government's
agreement with the IMF (International Monetary Fund)," he said.
Indonesia, the world's second biggest producer of CPO,
slapped the levy on CPO and its derivatives after the rupiah
nose-dived at the onset of the financial crisis, making exports
much more profitable than domestic sales and leading to
staggering shortages of cooking oil.
Export tax was lowered to 40 percent in February, from the 60
percent imposed in September last year.
KDI
Teddy also announced that the government had lifted the
monopoly granted to the Indonesian Distribution Cooperative (KDI)
to distribute cooking oil on the domestic market.
"Under the Minister of Trade and Industry's decree signed
today (Friday), all state-owned companies are also freed from the
obligation to sell their CPO products to KDI," he said.
Previously, state-owned plantation companies were obliged to
sell their oil palm kernels and CPO products to KDI.
The KDI was established in the middle of last year to replace
the State Logistics Agency's (Bulog) role in distributing cooking
oil in the country.
CPO produced by state-owned plantations account for over 35
percent of total domestic CPO production, Teddy said.
Teddy said Indonesia was expected to produce 5.6 million tons
of CPO this year, an increase of about 4 percent compared to 5.4
million tons produced last year. (gis)