Crude palm oil export tax to remain in place: Minister

JAKARTA (JP): Industry and trade minister Rahardi Ramelan has reiterated that the government will not reduce export taxes on crude palm oil (CPO) and its derivatives, despite the recent decline in cooking oil prices on the domestic market.

"Up to now, I have not made any changes to the CPO export tax because if I lower the tax, many (palm oil) producers would get the wrong idea and that would create price turmoil," Rahardi was quoted by Antara as saying on Friday.

He said he feared the price of cooking oil, the refined byproduct of CPO, would rise sharply again if the government lowered the taxes.

But the government might review export taxes on CPO and its byproducts before the end of the year, he told reporters at his office.

The government raised the export tax on CPO to 60 percent last July in a bid to discourage exports of the commodity.

It also set taxes on refined bleached deodorized (RBD) olein at 55 percent, crude stearin at 25 percent, RBD stearin at 20 percent, Crude palm kernel oil at 50 percent, RBD palm kernel oil at 45 percent, crude coconut oil at 20 percent and RBD coconut oil at 15 percent.

CPO producers began to export most of their produce to cash in on the rupiah's collapse in value against the U.S. dollar, leading to a shortage in supply at home. The price of cooking oil increased sharply as a result.

According to the ministry's Center of Market Information, unpackaged cooking oil was selling at traditional markets for around Rp 3,700 per kilogram, while packaged cooking oil was selling at Rp 6,400 per liter on Friday.

Packaged cooking oil is priced at around Rp 7,000 in supermarkets.

On Friday, the ministry formally lifted its export ban on several food products which are no longer subsidized by the government.

They include all types of wheat and wheat flours, rice flour, soybean, sugarcane, sugar and kerosene.

Commodities that are still banned from export are husked and unhusked rice.

In September, the government lifted subsidies on the import of wheat flour, sugar and soybeans. Subsidies on the import of rice remain in place. (das)