Curb measure on CPO export explained
JAKARTA (JP): The government announced yesterday full details of its new measure to curb exports of palm oil and related products, in a bid to stabilize the commodity's local prices.
Under a Ministry of Industry and Trade decree, which goes into effect today, the government appointed 17 groups, owners of 214 oil palm plantation companies and all olein refineries in the country, to supply the local demand for crude palm oil (CPO) and olein.
The 17 groups include the Salim Group, which owns 12 crude palm oil mills, PT Bukit Kapur Reksa and Group, PT Smart Corp and Group, PT Musim Mas and Group, Raja Garuda Mas and Group, Astra AGRO Lestari, and the joint marketing division of state-owned PTPN.
The remaining 10 companies are Tunas Baru Lampung and Group, the Lonsum Group, Socfindo, Dutapalma Nusantara, Sipef and Tolan Tiga, Permata Hijau Sawit and Tasik Raja, the Tidar Group, GAPKI and AIMI, Hasil Karsa and Group, and PT Bintang Era Sinar Tama and Group.
Minister of Industry and Trade Tunky Ariwibowo said yesterday the decree, which would be effective for the next six months, required the 17 companies to sell 80 percent of their total production locally.
This would total about 2.3 million tons of CPO and 1.86 million tons of olein, he said.
The companies were free to export the remaining 20 percent of their product, he said.
"We expect that the production volume allocated for the domestic market by the 17 groups will supply local demand for the next six months," he said.
He said a sufficient amount of the commodity would curb the much expected price hike of cooking oil, especially around the Islamic Ramadhan season in January.
Tunky said companies, other than the 17 groups, were not obligated to allocate their products for the domestic market.
However, the companies would be imposed a new tax, in addition to the 4 percent to 5 percent existing export tax, if they exported over 20 percent of their products, he said.
The new tax, which also comes into effect today, is 30 percent for CPO, refined bleached deodorized (RBD) palm oil and crude olein. The government also imposes a 28 percent surcharge on refined bleached deodorized olein.
The government now charges a 5 percent export tax on CPO, RBD palm oil and RBD olein, and a 4 percent export tax on crude olein.
Tunky said those which allocate 80 percent of their products to the local market would be exempt from the export tax.
Those companies could export their products themselves or through one of the 17 groups, he added.
The new export measure will limit Salim Group's CPO exports in the next six months to about 31,995 tons, out of a total production of 159,974 tons, and its olein to 13,793 tons out of 68,967 tons.
Smart Corp's exports will also be curbed to 50,804 tons of CPO and 26,375 tons of olein, while those of Musim Mas to 42,988 tons of CPO and 90,284 tons of olein, and those of Bukit Kapur to 54,312 tons of CPO and 75,749 tons of olein.
Raja Garuda's exports will be also limited to 27,356 tons of CPO and 14,098 tons of olein, while those of PTPN will be cut to 145,712 tons of CPO and 15,047 tons of olein.
Astra's exports will be lowered to 23,448 tons of CPO and 2,652 tons of olein under the new export quota.
Asked whether the new tax would help curb the commodity's exports, Tunky said the companies would likely profit more from trading in the domestic market than having to pay the export surcharge.
"But we'll have to wait until the law is fully implemented to see if it works."
The government could not stop companies from exporting, he said, adding: "This is just to discourage them, we are not halting export activities." (das)