CPO reference prices lowered by up to 40%

JAKARTA (JP): The government cut the reference prices used to calculate the payment of export taxes on crude palm oil (CPO) and its byproducts by between 20 percent and 40 percent.

The director general of international trade at the Ministry of Industry and Trade, Djoko Moeljono, said reference prices were cut because the international price of CPO and its byproducts had fallen and the rupiah had strengthened against the U.S. dollar. He added that the cuts became effective on July 18.

"The reference prices were cut to allow farmers to earn more from the sale of their oil palm kernel," he said, adding that the price of oil palm kernel had dropped to Rp 300 per kilogram from Rp 550 per kilogram in late April.

The price of CPO on the international market is currently US$327 per metric ton from $469 per metric ton in late April.

The new reference price of CPO was set at $260 per metric ton It was previously $365 per metric ton. The new reference price of oil palm kernel is $55 per ton, refined bleached deodorized (RBD) palm oil is $270 per ton, crude palm olein is $210 per ton and RBD palm olein is $230 per ton.

The base price of RBD palm olein in up to five-kilogram packages was set at $250 per ton, while the reference price for crude palm stearin was established at $130 per ton. The new reference price for RBD palm stearin is $140 per ton, crude palm kernel oil is $385 per ton and RBD palm kernel oil is $415 per ton.

The new reference prices will be effective from June 18 to July 20.

Djoko said with a current export tax of 30 percent and the old reference prices, CPO exporters would have suffered a loss of Rp 52 for each kilogram of CPO they exported.

"With new base prices, exporters will earn a profit on their CPO exports," he said.

The export tax on CPO and its byproducts was lowered to a maximum 30 percent earlier this month. The export tax had been at 40 percent since February.

Djoko said the government would continue watching CPO prices on the local and international markets and make further adjustments to reference prices.

"If CPO prices continue to decline in the coming weeks, we will lower reference prices even further," he said. (gis)