Govt cancels CPO tax hike
Govt cancels CPO tax hike
Adianto P. Simamora, The Jakarta Post, Jakarta
The government has canceled plans to raise the export tax on
crude palm oil (CPO) as local producers have pledged to provide
enough of the commodity for the local cooking oil industry.
"Since CPO producers have pledged to provide a sufficient
supply for the domestic market, I have canceled the plan to raise
the export tax," Minister of Industry and Trade Rini MS Soewandi
told Antara.
She made the statement after meeting with both the Indonesian
Palm Oil Producers' Association (Gapki) and the Association of
Indonesian Cooking Oil Producers (AIMMI).
Rini earlier threatened to raise the export tax on CPO if
local producers did not pledge to provide a large enough supply
for the local cooking oil industry.
She voiced the threat amid fears that the price of cooking oil
would soar ahead of the upcoming religious festivities, including
Ramadhan and Christmas, when demand for the commodity was
normally on the increase. Furthermore, CPO producers are
enthusiastically exporting products following the rise in the
price of the commodity on the international market.
CPO is the raw material used in the production of cooking oil.
The government imposes a three percent export tax on CPO.
Separately, Adi Wisoko, the secretary-general of AIMMI, told
The Jakarta Post that the supply of cooking oil would be adequate
for the upcoming festive season.
"People should not be worried about a lack of cooking oil for
the end of year celebrations, as the supply is adequate," Adi
said.
"We also don't have a problem with the supply of CPO and the
price of cooking oil is also relatively stable now," Adi said.
The price of CPO has been hovering at above US$400 per ton
over the past several months, compared to about $300 last year.
Analysts have predicted that the commodity's price could break
through the $500 mark next year.
GAPKI has repeatedly called on the government to remove the
existing export tax on CPO to boost the competitiveness of local
producers in export markets.
Indonesia, the world's second largest palm oil producer after
Malaysia, produces about nine million tons a year, while local
consumption amounts to only three million tons.
The country aims to export some 5.5 million tons this year, up
from 4.9 million in 2001.
Meanwhile, Sudar SA, the director general of foreign trade
affairs at the ministry, said the government would continue
supervising the supply of CPO at home.
"We will increase the export duty on CPO if producers fail to
supply a sufficient amount of it for local cooking oil
producers," Sudar said.